Primerica Life Insurance Practice Exam
(2025) – Real Questions with Correct
Answers
An underwriter is reviewing the medical questions in the application and needs further information due
to a medical situation the applicant had in the past. What will the underwriter require?
a. statement of continued good health
b. attending physician statement
c. a complete medical record
d. sworn health affidavit from the applicant - ANS b. Attending Physician statement- APS is used to
obtain medical details about a specific condition which has shown up in the application; the insurance
company orders the information directly form the physician, using a signed authorization which was
part of the application
Attempting to determine how much insurance an individual would require base upon their financial
objectives is known as:
a. viatical approach
b. needs approach
c. human life value approach
d. estate planning - ANS b. needs approach-determines how much benefit would be necessary to
replace the loss income and increased expense should the insured die prematurely.
Which of the following would be least likely to be considered a legitimate need that would be paid by
insurance proceeds?
a. vacation travel expenses
b. travel expenses for family to come to the funeral
c. debt cancellation
d. day care - ANS a. vacation travel expenses
Which of the following is NOT true of life settlements?
a. the seller must be terminally ill
b. they could be used for a key person coverage
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,c. they could be sold for an amount grater than the current cash value
d. they involve insurance policies with large face amounts - ANS a. the seller must be terminally ill-
With Life Settlements, unlike with viatical settlements, the seller does not need to be terminally ill. They
usually involve life insurance policies with a face amount of $250,000 or more, "key-person" coverage,
corporated owned policies, or policies representing excess coverage that is no longer needed, and could
be sold for an amount greater than the current cash value.
Key person life insurance does NOT reimburse a company for which of the following?
a. for a loss of previous business resulting from a key person's death
b. for a reduction of profits resulting from a key person's death
c. for increased pension liability resulting from a key person's death
d. for a loss of leadership resulting from a key person's death - ANS c. for increased pension liability
resulting from a key person's death
Which of the following statements is correct about a standard risk classification in the same age group
and with similar lifestyles?
a. standard risk pays a higher premium than a substandard risk
b. standard risk requires extra rating
c. standard risk is also known as high exposure risk
d. standard risk is representative of the majority of people - ANS d. standard risk is representative
of the majority of people-average risk
What are the three ratings of classification that denotes the risk level of insureds? - ANS Standard,
substandard, and preferred
Which of the following individuals must have insurable interest in the insured?
a. producer
b. policy owner
c. beneficiary
d. actuary - ANS b. policy owner-the policy owner must have an insurable interest in the insured,
i.e. his/her own life if the policy owner and the insured is the same person, or in the life of a family
member or a business partner.
The insurance company underwriter could find information concerning the personal activities and
character of an applicant from which of the following reports?
a. attending physician
b. insurance company who provided the prior coverage
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, c. Medical Information Bureau
d. agent's report - ANS d. agent's report- the agent communicates his/her observations concerning
an applicant in the agent's report
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the
business is called:
a. legal reserve
b. dividend accumulation
c. premium tax
d. expenses - ANS d. expenses- loading is another term for expenses. Net premium (mortality
minus interest earned) plus expenses (or loading) equal the gross premium Who is the owner and who is
the beneficiary on a Key Person Life Insurance Policy?
a. the employer is the owner and the Key Person is the beneficiary
b. The Key Person is the owner and beneficiary
c. The Key Person is the owner and the employer is the beneficiary
d. the employer is the owner and beneficiary - ANS d. the employer is the owner and beneficiary-
with key-person coverage, the business (the employer) is the applicant, owner, premium payer, and
beneficiary.
Which of the following is a generic consumer publication that explains life insurance in general terms in
order to assist the applicant in the decision-making process?
a. insurance index
b. policy summary
c. illustrations
d. buyer's guide - ANS d. buyer's guide- a consumer publication that explains life insurance in
general terms in order to assist the applicant in the decision-making process.
Which of the following entities regulates variable life policies?
a. the Federal Government only
b. Securities and Exchange Commission (SEC) and the Insurance Department
c. Financial Industry Regulatory Authority and the State Guarantee Association
d. the Insurance Department only - ANS b. b. Securities and Exchange Commission (SEC) and the
Insurance Department -Variable life insurance is regualted by bothe the state and federal governments
SEC and the Financial Industry Regulatory Authority (FINRA) and the Insurance Department
What is the purpose of key person insurance?
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(2025) – Real Questions with Correct
Answers
An underwriter is reviewing the medical questions in the application and needs further information due
to a medical situation the applicant had in the past. What will the underwriter require?
a. statement of continued good health
b. attending physician statement
c. a complete medical record
d. sworn health affidavit from the applicant - ANS b. Attending Physician statement- APS is used to
obtain medical details about a specific condition which has shown up in the application; the insurance
company orders the information directly form the physician, using a signed authorization which was
part of the application
Attempting to determine how much insurance an individual would require base upon their financial
objectives is known as:
a. viatical approach
b. needs approach
c. human life value approach
d. estate planning - ANS b. needs approach-determines how much benefit would be necessary to
replace the loss income and increased expense should the insured die prematurely.
Which of the following would be least likely to be considered a legitimate need that would be paid by
insurance proceeds?
a. vacation travel expenses
b. travel expenses for family to come to the funeral
c. debt cancellation
d. day care - ANS a. vacation travel expenses
Which of the following is NOT true of life settlements?
a. the seller must be terminally ill
b. they could be used for a key person coverage
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,c. they could be sold for an amount grater than the current cash value
d. they involve insurance policies with large face amounts - ANS a. the seller must be terminally ill-
With Life Settlements, unlike with viatical settlements, the seller does not need to be terminally ill. They
usually involve life insurance policies with a face amount of $250,000 or more, "key-person" coverage,
corporated owned policies, or policies representing excess coverage that is no longer needed, and could
be sold for an amount greater than the current cash value.
Key person life insurance does NOT reimburse a company for which of the following?
a. for a loss of previous business resulting from a key person's death
b. for a reduction of profits resulting from a key person's death
c. for increased pension liability resulting from a key person's death
d. for a loss of leadership resulting from a key person's death - ANS c. for increased pension liability
resulting from a key person's death
Which of the following statements is correct about a standard risk classification in the same age group
and with similar lifestyles?
a. standard risk pays a higher premium than a substandard risk
b. standard risk requires extra rating
c. standard risk is also known as high exposure risk
d. standard risk is representative of the majority of people - ANS d. standard risk is representative
of the majority of people-average risk
What are the three ratings of classification that denotes the risk level of insureds? - ANS Standard,
substandard, and preferred
Which of the following individuals must have insurable interest in the insured?
a. producer
b. policy owner
c. beneficiary
d. actuary - ANS b. policy owner-the policy owner must have an insurable interest in the insured,
i.e. his/her own life if the policy owner and the insured is the same person, or in the life of a family
member or a business partner.
The insurance company underwriter could find information concerning the personal activities and
character of an applicant from which of the following reports?
a. attending physician
b. insurance company who provided the prior coverage
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, c. Medical Information Bureau
d. agent's report - ANS d. agent's report- the agent communicates his/her observations concerning
an applicant in the agent's report
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the
business is called:
a. legal reserve
b. dividend accumulation
c. premium tax
d. expenses - ANS d. expenses- loading is another term for expenses. Net premium (mortality
minus interest earned) plus expenses (or loading) equal the gross premium Who is the owner and who is
the beneficiary on a Key Person Life Insurance Policy?
a. the employer is the owner and the Key Person is the beneficiary
b. The Key Person is the owner and beneficiary
c. The Key Person is the owner and the employer is the beneficiary
d. the employer is the owner and beneficiary - ANS d. the employer is the owner and beneficiary-
with key-person coverage, the business (the employer) is the applicant, owner, premium payer, and
beneficiary.
Which of the following is a generic consumer publication that explains life insurance in general terms in
order to assist the applicant in the decision-making process?
a. insurance index
b. policy summary
c. illustrations
d. buyer's guide - ANS d. buyer's guide- a consumer publication that explains life insurance in
general terms in order to assist the applicant in the decision-making process.
Which of the following entities regulates variable life policies?
a. the Federal Government only
b. Securities and Exchange Commission (SEC) and the Insurance Department
c. Financial Industry Regulatory Authority and the State Guarantee Association
d. the Insurance Department only - ANS b. b. Securities and Exchange Commission (SEC) and the
Insurance Department -Variable life insurance is regualted by bothe the state and federal governments
SEC and the Financial Industry Regulatory Authority (FINRA) and the Insurance Department
What is the purpose of key person insurance?
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