PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the
insurance company that was not taxable. This year, she did not receive a check from the insurer. From
what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock - ✓✓✓A. mutual
funds not paid out after paying claims and other operating costs are returned to the policy owners in the
form of a dividend. if all funds are paid out, no dividends are paid
Following a career change, an insured is no longer required to perform many physical activities, so he has
implemented a program where he walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
a. retention
b. reduction
c. transfer
d. avoidance - ✓✓✓B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant - ✓✓✓A. an applicant submits an application to the
insurer
P a g e 1 | 71
,PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
in insurance, the offer is usually made by the applicant in the form of an application. acceptance takes place
when an insurer's underwriter approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards - ✓✓✓A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - ✓✓✓A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
which of the following best describes an insurance company that has been formed under the laws of this
state?
a. domestic
b. sovereign
c. alien
d. foreign - ✓✓✓A. domestic
a company is domestic when doing business within the state in which it is incorporated
which of the following factors is NOT considered by an underwriter when determining the premium rates for
an individual seeking insurance?
P a g e 2 | 71
,PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
a. medical history
b. sex
c. age
d. race - ✓✓✓D. race
age, medical history, and sex provide sound statistical date for determining the probability of loss. Race,
religion, sexual 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; therefore, they are considered to be discriminatory
in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds - ✓✓✓A. handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a trust capacity
the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority - ✓✓✓B. express authority
express powers are written into the contract between the insurer and the agent
insurance policies are not drawn up though negotiations, and an insured has little to say about its provisions.
what contract characteristic does this describe?
a. unilateral
b. conditional
c. personal
d. adhesion - ✓✓✓D. adhesion
P a g e 3 | 71
, PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or reject the
policy as its written
which of the following insurers are owned by stockholders who have the usual rights of ownership, including
the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual - ✓✓✓C. stock
only stock insurance companies are owned and controlled by stockholders
which of the following best describes the concept that the insured pays a small amount of premium for a
large amount of risk on the part of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion - ✓✓✓C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a
large risk
When an insured makes truthful statements on the application for insurance and pays the required
premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration - ✓✓✓D. consideration
P a g e 4 | 71
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the
insurance company that was not taxable. This year, she did not receive a check from the insurer. From
what type of insurer did the insured purchase the policy?
a. mutual
b. reciprocal
c. nonprofit service organization
d. stock - ✓✓✓A. mutual
funds not paid out after paying claims and other operating costs are returned to the policy owners in the
form of a dividend. if all funds are paid out, no dividends are paid
Following a career change, an insured is no longer required to perform many physical activities, so he has
implemented a program where he walks and jogs for 45 minutes each morning. The insured has also
eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
a. retention
b. reduction
c. transfer
d. avoidance - ✓✓✓B. reduction
the insured's change in lifestyle and habits would likely reduce the chances of health problems
In insurance, an offer is usually made when
a. an applicant submits an application to the insurer
b. the insurer approves the application and receives the initial premium
c. the agent hands the policy to the policyholder
d. an agent explains a policy to a potential applicant - ✓✓✓A. an applicant submits an application to the
insurer
P a g e 1 | 71
,PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
in insurance, the offer is usually made by the applicant in the form of an application. acceptance takes place
when an insurer's underwriter approves the application and issues a policy
the causes of loss insured against in an insurance policy are known as
a. perils
b. losses
c. risks
d. hazards - ✓✓✓A. perils
perils are the causes of loss insured against in an insurance policy
what documentation grants express authority to an agent?
a. agents contract with the principal
b. agents insurance license
c. fiduciary contract
d. state provisions - ✓✓✓A. agents contract with the principal
the principal grants authority to an agent through the agent's contract
which of the following best describes an insurance company that has been formed under the laws of this
state?
a. domestic
b. sovereign
c. alien
d. foreign - ✓✓✓A. domestic
a company is domestic when doing business within the state in which it is incorporated
which of the following factors is NOT considered by an underwriter when determining the premium rates for
an individual seeking insurance?
P a g e 2 | 71
,PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
a. medical history
b. sex
c. age
d. race - ✓✓✓D. race
age, medical history, and sex provide sound statistical date for determining the probability of loss. Race,
religion, sexual 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; therefore, they are considered to be discriminatory
in insurance transactions, fiduciary responsibility means
a. handling insurer funds in a trust capacity
b. maintaining good credit record
c. being liable with respect to payment of claims
d. commingling premiums with agents personal funds - ✓✓✓A. handling insurer funds in a trust capacity
an agents fiduciary responsibility includes handling insurer funds in a trust capacity
the authority granted to an agent through the agent's contract is referred to as
a. absolute authority
b. express authority
c. apparent authority
d. implied authority - ✓✓✓B. express authority
express powers are written into the contract between the insurer and the agent
insurance policies are not drawn up though negotiations, and an insured has little to say about its provisions.
what contract characteristic does this describe?
a. unilateral
b. conditional
c. personal
d. adhesion - ✓✓✓D. adhesion
P a g e 3 | 71
, PRIMERICA LIFE INSURANCE EXAM WITH
100% CORRECT ANSWERS LATEST UPDATED
2026. GUARANTEED SUCCESS.,,
a contract of adhesion is prepared by only the insurer; the insured's only option is to accept or reject the
policy as its written
which of the following insurers are owned by stockholders who have the usual rights of ownership, including
the right of voting?
a. reciprocal
b. fraternal
c. stock
d. mutual - ✓✓✓C. stock
only stock insurance companies are owned and controlled by stockholders
which of the following best describes the concept that the insured pays a small amount of premium for a
large amount of risk on the part of the insurance company?
a. subrogation
b. warranty
c. aleatory
d. adhesion - ✓✓✓C. aleatory
an insurance contract is an aleatory contract in that it requires a relatively small amount of premium for a
large risk
When an insured makes truthful statements on the application for insurance and pays the required
premium, it is known as which of the following?
a. legal purpose
b. contract of adhesion
c. acceptance
d. consideration - ✓✓✓D. consideration
P a g e 4 | 71
