Primerica exam 2 QUESTIONS WITH COMPLETE SOLUTIONS

A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called correct answer: Cost of living rider. What method is used to determine the taxable portion of each annuity payment? correct answer: The exclusion ratio The ratio of the total investment in that contract to the expected return is developed to determine the portion of the annuity payment that will be taxable and nontaxable. A set of legal or regulatory conditions that affect an insurer's ability to collect premiums commensurate with the level of risk incurred would be considered a(n): correct answer: Legal hazard. Legal hazard is defined as a set of legal or regulatory conditions that affect an insurer's ability to collect premiums commensurate with the level of risk incurred. Concerning Juvenile Life insurance, which of the following statements is INCORRECT? correct answer: Juvenile Life is classified as any life insurance purchased by a minor. If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option