PRIMERICA COMPLETE QUESTIONS AND
SOLUTIONS TESTED ANSWERS
◉ if an applicant for a life insurance policy and person to be
insured by the policy are two different people, the underwriter
would be concerned about
a. which individual will pay the premium
b. whether an insurable interest exists between the individuals
c. the gender of applicant
d. the type of policy requested
Answer: B. whether an insurable interest exists between the
individuals
an insurable interest must exist at the time of the policy is issued.
Some relationships are automatically presumed to qualify as an
insurable interest. ex: spouses, parents, children, and certain
business relationships
◉ When J. applied for a life insurance policy, the agent informed
him that a medical exam would be required. The exam may be
completed by
a. a physician of the applicant's choice and at his expense
b. a home office underwriter
,c. a paramedic or examining physician at the insurer's expense
d. the agent
Answer: C. a paramedic or examining physician at the insurer's
expense
the applicant may be allowed to select the physician or paramedic
facility to perform the examination. The insurer pays the cost of
such an examination
◉ The factor added to the net premium to cover the costs of the
insurer in obtaining and maintaining the business is called
a. expenses
b. legal reserve
c. dividend accumulation
d. premium tax
Answer: A. expenses
loading is another term for expenses. Net premium (mortality
minus interest earned) plus expenses (or loading) equal the gross
premium
◉ which of the following methods of calculating the amount of life
insurance needed takes into account the insured's wages, years
until retirement, and inflation?
,a. needs approach
b. blackout approach
c. lump-sum approach
d. human life value approach
Answer: D. human life value approach
human life value approach is determined by the loss of the income
that would result with the death of the insured, after making
adjustments for expenses, inflation, etc.
◉ which of the following is NOT required for a producer to tell a
prospect?
a. how the insurer would use any outside information regarding
the applicant
b. an explanation of products that the insurer is selling
c. what requirements the producer needed to meet to obtain the
insurance license
d. from what outside sources the insurer would seek information,
regarding the insured
Answer: C. what requirements the producer needed to meet to
obtain the insurance license
, agents are required to inform prospects of the products they are
selling, as well as their information collecting practices
◉ which of the following statements concerning buy-sell
agreements is true?
a. premium paid are deductible as a business expense
b. benefits received are considered income taxable
c. buy-sell agreements pay in the event of a medical emergency
d. buy-sell agreements are normally funded with a life insurance
expectancy
Answer: D. buy-sell agreements are normally funded with life
insurance expectancy
a buy-sell agreements is simply a contract that establishes what
willl be done with a business in the event that an owner dies. Buy-
sell agreements are normally funded with a life insurance policy
◉ Who may complete a paramedical report?
a. an underwriter
b. a nursing assistant
c. a registered nurse
d. a spouse
Answer: C. a registered nurse
SOLUTIONS TESTED ANSWERS
◉ if an applicant for a life insurance policy and person to be
insured by the policy are two different people, the underwriter
would be concerned about
a. which individual will pay the premium
b. whether an insurable interest exists between the individuals
c. the gender of applicant
d. the type of policy requested
Answer: B. whether an insurable interest exists between the
individuals
an insurable interest must exist at the time of the policy is issued.
Some relationships are automatically presumed to qualify as an
insurable interest. ex: spouses, parents, children, and certain
business relationships
◉ When J. applied for a life insurance policy, the agent informed
him that a medical exam would be required. The exam may be
completed by
a. a physician of the applicant's choice and at his expense
b. a home office underwriter
,c. a paramedic or examining physician at the insurer's expense
d. the agent
Answer: C. a paramedic or examining physician at the insurer's
expense
the applicant may be allowed to select the physician or paramedic
facility to perform the examination. The insurer pays the cost of
such an examination
◉ The factor added to the net premium to cover the costs of the
insurer in obtaining and maintaining the business is called
a. expenses
b. legal reserve
c. dividend accumulation
d. premium tax
Answer: A. expenses
loading is another term for expenses. Net premium (mortality
minus interest earned) plus expenses (or loading) equal the gross
premium
◉ which of the following methods of calculating the amount of life
insurance needed takes into account the insured's wages, years
until retirement, and inflation?
,a. needs approach
b. blackout approach
c. lump-sum approach
d. human life value approach
Answer: D. human life value approach
human life value approach is determined by the loss of the income
that would result with the death of the insured, after making
adjustments for expenses, inflation, etc.
◉ which of the following is NOT required for a producer to tell a
prospect?
a. how the insurer would use any outside information regarding
the applicant
b. an explanation of products that the insurer is selling
c. what requirements the producer needed to meet to obtain the
insurance license
d. from what outside sources the insurer would seek information,
regarding the insured
Answer: C. what requirements the producer needed to meet to
obtain the insurance license
, agents are required to inform prospects of the products they are
selling, as well as their information collecting practices
◉ which of the following statements concerning buy-sell
agreements is true?
a. premium paid are deductible as a business expense
b. benefits received are considered income taxable
c. buy-sell agreements pay in the event of a medical emergency
d. buy-sell agreements are normally funded with a life insurance
expectancy
Answer: D. buy-sell agreements are normally funded with life
insurance expectancy
a buy-sell agreements is simply a contract that establishes what
willl be done with a business in the event that an owner dies. Buy-
sell agreements are normally funded with a life insurance policy
◉ Who may complete a paramedical report?
a. an underwriter
b. a nursing assistant
c. a registered nurse
d. a spouse
Answer: C. a registered nurse
