PRIMERICA LIFE INSURANCE EXAM
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1. An insured purchased an insurance policy 5 years ago. A. mutual
Last year, she received a dividend check from the in-
surance company that was not taxable. This year, she funds not paid out af-
did not receive a check from the insurer. From what ter paying claims and oth-
type of insurer did the insured purchase the policy? er operating costs are re-
turned to the policy own-
a. mutual ers in the form of a divi-
b. reciprocal dend. if all funds are paid
c. nonprofit service organization out, no dividends are paid
d. stock
2. Following a career change, an insured is no longer re- B. reduction
quired to perform many physical activities, so he has
implemented a program where he walks and jogs for the insured's change in
45 minutes each morning. The insured has also elim- lifestyle and habits would
inated most fatty foods from his diet. Which method likely reduce the chances
of dealing with risk does this scenario describe? of health problems
a. retention
b. reduction
c. transfer
d. avoidance
3. In insurance, an offer is usually made when A. an applicant submits an
application to the insurer
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives in insurance, the offer
the initial premium is usually made by the
c. the agent hands the policy to the policyholder applicant in the form
d. an agent explains a policy to a potential applicant of an application. accep-
tance takes place when an
insurer's underwriter ap-
, PRIMERICA LIFE INSURANCE EXAM
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proves the application and
issues a policy
4. the causes of loss insured against in an insurance A. perils
policy are known as
perils are the causes of
a. perils loss insured against in an
b. losses insurance policy
c. risks
d. hazards
5. what documentation grants express authority to an A. agents contract with the
agent? principal
a. agents contract with the principal the principal grants au-
b. agents insurance license thority to an agent
c. fiduciary contract through the agent's con-
d. state provisions tract
6. which of the following best describes an insurance A. domestic
company that has been formed under the laws of this
state? a company is domes-
tic when doing business
a. domestic within the state in which it
b. sovereign is incorporated
c. alien
d. foreign
7. which of the following factors is NOT considered by an D. race
underwriter when determining the premium rates for
an individual seeking insurance? age, medical history, and
sex provide sound sta-
a. medical history tistical date for deter-
, PRIMERICA LIFE INSURANCE EXAM
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b. sex mining the probability of
c. age loss. Race, religion, sex-
d. race ual orientation, etc. are
the factors that cannot be
used because there is not
sound statistical data to
show that they effect the
probability of loss; there-
fore, they are considered
to be discriminatory
8. in insurance transactions, fiduciary responsibility A. handling insurer funds
means in a trust capacity
a. handling insurer funds in a trust capacity an agents fiduciary re-
b. maintaining good credit record sponsibility includes han-
c. being liable with respect to payment of claims dling insurer funds in a
d. commingling premiums with agents personal funds trust capacity
9. the authority granted to an agent through the agent's B. express authority
contract is referred to as
express powers are writ-
a. absolute authority ten into the contract be-
b. express authority tween the insurer and the
c. apparent authority agent
d. implied authority
10. insurance policies are not drawn up though negotia- D. adhesion
tions, and an insured has little to say about its provi-
sions. what contract characteristic does this describe? a contract of adhesion is
prepared by only the in-
a. unilateral surer; the insured's only
b. conditional
, PRIMERICA LIFE INSURANCE EXAM
Study online at https://quizlet.com/_6ynkan
c. personal option is to accept or re-
d. adhesion ject the policy as its written
11. which of the following insurers are owned by stock- C. stock
holders who have the usual rights of ownership, in-
cluding the right of voting? only stock insurance com-
panies are owned and
a. reciprocal controlled by stockholders
b. fraternal
c. stock
d. mutual
12. which of the following best describes the concept that C. aleatory
the insured pays a small amount of premium for a
large amount of risk on the part of the insurance an insurance contract is an
company? aleatory contract in that it
requires a relatively small
a. subrogation amount of premium for a
b. warranty large risk
c. aleatory
d. adhesion
13. When an insured makes truthful statements on the D. consideration
application for insurance and pays the required pre-
mium, it is known as which of the following? consideration is some-
thing of value that each
a. legal purpose party gives to the other.
b. contract of adhesion The consideration on the
c. acceptance part of the insured is the
d. consideration payment of premium and
the representations made
in the application
Study online at https://quizlet.com/_6ynkan
1. An insured purchased an insurance policy 5 years ago. A. mutual
Last year, she received a dividend check from the in-
surance company that was not taxable. This year, she funds not paid out af-
did not receive a check from the insurer. From what ter paying claims and oth-
type of insurer did the insured purchase the policy? er operating costs are re-
turned to the policy own-
a. mutual ers in the form of a divi-
b. reciprocal dend. if all funds are paid
c. nonprofit service organization out, no dividends are paid
d. stock
2. Following a career change, an insured is no longer re- B. reduction
quired to perform many physical activities, so he has
implemented a program where he walks and jogs for the insured's change in
45 minutes each morning. The insured has also elim- lifestyle and habits would
inated most fatty foods from his diet. Which method likely reduce the chances
of dealing with risk does this scenario describe? of health problems
a. retention
b. reduction
c. transfer
d. avoidance
3. In insurance, an offer is usually made when A. an applicant submits an
application to the insurer
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives in insurance, the offer
the initial premium is usually made by the
c. the agent hands the policy to the policyholder applicant in the form
d. an agent explains a policy to a potential applicant of an application. accep-
tance takes place when an
insurer's underwriter ap-
, PRIMERICA LIFE INSURANCE EXAM
Study online at https://quizlet.com/_6ynkan
proves the application and
issues a policy
4. the causes of loss insured against in an insurance A. perils
policy are known as
perils are the causes of
a. perils loss insured against in an
b. losses insurance policy
c. risks
d. hazards
5. what documentation grants express authority to an A. agents contract with the
agent? principal
a. agents contract with the principal the principal grants au-
b. agents insurance license thority to an agent
c. fiduciary contract through the agent's con-
d. state provisions tract
6. which of the following best describes an insurance A. domestic
company that has been formed under the laws of this
state? a company is domes-
tic when doing business
a. domestic within the state in which it
b. sovereign is incorporated
c. alien
d. foreign
7. which of the following factors is NOT considered by an D. race
underwriter when determining the premium rates for
an individual seeking insurance? age, medical history, and
sex provide sound sta-
a. medical history tistical date for deter-
, PRIMERICA LIFE INSURANCE EXAM
Study online at https://quizlet.com/_6ynkan
b. sex mining the probability of
c. age loss. Race, religion, sex-
d. race ual orientation, etc. are
the factors that cannot be
used because there is not
sound statistical data to
show that they effect the
probability of loss; there-
fore, they are considered
to be discriminatory
8. in insurance transactions, fiduciary responsibility A. handling insurer funds
means in a trust capacity
a. handling insurer funds in a trust capacity an agents fiduciary re-
b. maintaining good credit record sponsibility includes han-
c. being liable with respect to payment of claims dling insurer funds in a
d. commingling premiums with agents personal funds trust capacity
9. the authority granted to an agent through the agent's B. express authority
contract is referred to as
express powers are writ-
a. absolute authority ten into the contract be-
b. express authority tween the insurer and the
c. apparent authority agent
d. implied authority
10. insurance policies are not drawn up though negotia- D. adhesion
tions, and an insured has little to say about its provi-
sions. what contract characteristic does this describe? a contract of adhesion is
prepared by only the in-
a. unilateral surer; the insured's only
b. conditional
, PRIMERICA LIFE INSURANCE EXAM
Study online at https://quizlet.com/_6ynkan
c. personal option is to accept or re-
d. adhesion ject the policy as its written
11. which of the following insurers are owned by stock- C. stock
holders who have the usual rights of ownership, in-
cluding the right of voting? only stock insurance com-
panies are owned and
a. reciprocal controlled by stockholders
b. fraternal
c. stock
d. mutual
12. which of the following best describes the concept that C. aleatory
the insured pays a small amount of premium for a
large amount of risk on the part of the insurance an insurance contract is an
company? aleatory contract in that it
requires a relatively small
a. subrogation amount of premium for a
b. warranty large risk
c. aleatory
d. adhesion
13. When an insured makes truthful statements on the D. consideration
application for insurance and pays the required pre-
mium, it is known as which of the following? consideration is some-
thing of value that each
a. legal purpose party gives to the other.
b. contract of adhesion The consideration on the
c. acceptance part of the insured is the
d. consideration payment of premium and
the representations made
in the application
