PRIMERICA LIFE INSURANCE EXAM
QUESTIONS AND ANSWERS UPDATED
2025/26 100% PASS
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
from the insurance company that was not taxable. This year, she did not receive a check from the
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
insurer. From what type of insurer did the insured purchase the policy?
II! II! II! II! II! II! II! II! II! II! II! II!
a. mutual
II!
b. reciprocal
II!
c. nonprofit service organization
II! II! II!
d. stock - Correct Answers A. mutual
II! II! II! II! II! II! II! II! II! II! II!
funds not paid out after paying claims and other operating costs are returned to the policy owners
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
in the form of a dividend. if all funds are paid out, no dividends are paid
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Following a career change, an insured is no longer required to perform many physical activities,
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! so he has implemented a program where he walks and jogs for 45 minutes each morning. The
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! does this scenario describe?
II! II! II!
a. retention
II!
b. reduction
II!
c. transfer
II!
d. avoidance - Correct Answers B. reduction
II! II! II! II! II! II! II! II! II! II! II!
the insured's change in lifestyle and habits would likely reduce the chances of health problems
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
,II! In insurance, an offer is usually made when
II! II! II! II! II! II! II!
a. an applicant submits an application to the insurer
II! II! II! II! II! II! II! II!
b. the insurer approves the application and receives the initial premium
II! II! II! II! II! II! II! II! II! II!
c. the agent hands the policy to the policyholder
II! II! II! II! II! II! II! II!
d. an agent explains a policy to a potential applicant - Correct Answers A. an applicant submits
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
an application to the insurer
II! II! II! II! II!
in insurance, the offer is usually made by the applicant in the form of an application. acceptance
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
takes place when an insurer's underwriter approves the application and issues a policy
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! the causes of loss insured against in an insurance policy are known as
II! II! II! II! II! II! II! II! II! II! II! II!
a. perils
II!
b. lossesII!
c. risks
II!
d. hazards - Correct Answers A. perils
II! II! II! II! II! II! II! II! II! II! II!
perils are the causes of loss insured against in an insurance policy
II! II! II! II! II! II! II! II! II! II! II!
II! what documentation grants express authority to an agent?
II! II! II! II! II! II! II!
a. agents contract with the principal
II! II! II! II! II!
b. agents insurance license
II! II! II!
c. fiduciary contract
II! II!
d. state provisions - Correct Answers A. agents contract with the principal
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
,the principal grants authority to an agent through the agent's contract
II! II! II! II! II! II! II! II! II! II!
II! which of the following best describes an insurance company that has been formed under the
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! laws of this state? II! II! II!
a. domestic II!
b. sovereign II!
c. alien II!
d. foreign - Correct Answers A. domestic
II! II! II! II! II! II! II! II! II! II! II!
a company is domestic when doing business within the state in which it is incorporated
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! which of the following factors is NOT considered by an underwriter when determining the
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! premium rates for an individual seeking insurance? II! II! II! II! II! II!
a. medical history
II! II!
b. sex II!
c. age II!
d. race - Correct Answers D. race
II! II! II! II! II! II! II! II! II! II! II!
age, medical history, and sex provide sound statistical date for determining the probability of loss.
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
Race, religion, sexual orientation, etc. are the factors that cannot be used because there is not
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
sound statistical data to show that they effect the probability of loss; therefore, they are
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
considered to be discriminatory
II! II! II! II!
II! in insurance transactions, fiduciary responsibility means
II! II! II! II! II!
, a. handling insurer funds in a trust capacity
II! II! II! II! II! II! II!
b. maintaining good credit record
II! II! II! II!
c. being liable with respect to payment of claims
II! II! II! II! II! II! II! II!
d. commingling premiums with agents personal funds - Correct Answers A. handling insurer
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
funds in a trust capacity
II! II! II! II! II!
an agents fiduciary responsibility includes handling insurer funds in a trust capacity
II! II! II! II! II! II! II! II! II! II! II!
II! the authority granted to an agent through the agent's contract is referred to as
II! II! II! II! II! II! II! II! II! II! II! II! II!
a. absolute authority
II! II!
b. express authority
II! II!
c. apparent authority
II! II!
d. implied authority - Correct Answers B. express authority
II! II! II! II! II! II! II! II! II! II! II! II! II!
express powers are written into the contract between the insurer and the agent
II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance policies are not drawn up though negotiations, and an insured has little to say about its
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! provisions. what contract characteristic does this describe?
II! II! II! II! II! II!
a. unilateral
II!
b. conditional
II!
c. personal
II!
d. adhesion - Correct Answers D. adhesion
II! II! II! II! II! II! II! II! II! II! II!
QUESTIONS AND ANSWERS UPDATED
2025/26 100% PASS
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
from the insurance company that was not taxable. This year, she did not receive a check from the
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
insurer. From what type of insurer did the insured purchase the policy?
II! II! II! II! II! II! II! II! II! II! II! II!
a. mutual
II!
b. reciprocal
II!
c. nonprofit service organization
II! II! II!
d. stock - Correct Answers A. mutual
II! II! II! II! II! II! II! II! II! II! II!
funds not paid out after paying claims and other operating costs are returned to the policy owners
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
in the form of a dividend. if all funds are paid out, no dividends are paid
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! Following a career change, an insured is no longer required to perform many physical activities,
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! so he has implemented a program where he walks and jogs for 45 minutes each morning. The
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! insured has also eliminated most fatty foods from his diet. Which method of dealing with risk
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! does this scenario describe?
II! II! II!
a. retention
II!
b. reduction
II!
c. transfer
II!
d. avoidance - Correct Answers B. reduction
II! II! II! II! II! II! II! II! II! II! II!
the insured's change in lifestyle and habits would likely reduce the chances of health problems
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
,II! In insurance, an offer is usually made when
II! II! II! II! II! II! II!
a. an applicant submits an application to the insurer
II! II! II! II! II! II! II! II!
b. the insurer approves the application and receives the initial premium
II! II! II! II! II! II! II! II! II! II!
c. the agent hands the policy to the policyholder
II! II! II! II! II! II! II! II!
d. an agent explains a policy to a potential applicant - Correct Answers A. an applicant submits
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
an application to the insurer
II! II! II! II! II!
in insurance, the offer is usually made by the applicant in the form of an application. acceptance
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
takes place when an insurer's underwriter approves the application and issues a policy
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! the causes of loss insured against in an insurance policy are known as
II! II! II! II! II! II! II! II! II! II! II! II!
a. perils
II!
b. lossesII!
c. risks
II!
d. hazards - Correct Answers A. perils
II! II! II! II! II! II! II! II! II! II! II!
perils are the causes of loss insured against in an insurance policy
II! II! II! II! II! II! II! II! II! II! II!
II! what documentation grants express authority to an agent?
II! II! II! II! II! II! II!
a. agents contract with the principal
II! II! II! II! II!
b. agents insurance license
II! II! II!
c. fiduciary contract
II! II!
d. state provisions - Correct Answers A. agents contract with the principal
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
,the principal grants authority to an agent through the agent's contract
II! II! II! II! II! II! II! II! II! II!
II! which of the following best describes an insurance company that has been formed under the
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! laws of this state? II! II! II!
a. domestic II!
b. sovereign II!
c. alien II!
d. foreign - Correct Answers A. domestic
II! II! II! II! II! II! II! II! II! II! II!
a company is domestic when doing business within the state in which it is incorporated
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! which of the following factors is NOT considered by an underwriter when determining the
II! II! II! II! II! II! II! II! II! II! II! II! II!
II! premium rates for an individual seeking insurance? II! II! II! II! II! II!
a. medical history
II! II!
b. sex II!
c. age II!
d. race - Correct Answers D. race
II! II! II! II! II! II! II! II! II! II! II!
age, medical history, and sex provide sound statistical date for determining the probability of loss.
II! II! II! II! II! II! II! II! II! II! II! II! II! II!
Race, religion, sexual orientation, etc. are the factors that cannot be used because there is not
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
sound statistical data to show that they effect the probability of loss; therefore, they are
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
considered to be discriminatory
II! II! II! II!
II! in insurance transactions, fiduciary responsibility means
II! II! II! II! II!
, a. handling insurer funds in a trust capacity
II! II! II! II! II! II! II!
b. maintaining good credit record
II! II! II! II!
c. being liable with respect to payment of claims
II! II! II! II! II! II! II! II!
d. commingling premiums with agents personal funds - Correct Answers A. handling insurer
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
funds in a trust capacity
II! II! II! II! II!
an agents fiduciary responsibility includes handling insurer funds in a trust capacity
II! II! II! II! II! II! II! II! II! II! II!
II! the authority granted to an agent through the agent's contract is referred to as
II! II! II! II! II! II! II! II! II! II! II! II! II!
a. absolute authority
II! II!
b. express authority
II! II!
c. apparent authority
II! II!
d. implied authority - Correct Answers B. express authority
II! II! II! II! II! II! II! II! II! II! II! II! II!
express powers are written into the contract between the insurer and the agent
II! II! II! II! II! II! II! II! II! II! II! II!
II! insurance policies are not drawn up though negotiations, and an insured has little to say about its
II! II! II! II! II! II! II! II! II! II! II! II! II! II! II! II!
II! provisions. what contract characteristic does this describe?
II! II! II! II! II! II!
a. unilateral
II!
b. conditional
II!
c. personal
II!
d. adhesion - Correct Answers D. adhesion
II! II! II! II! II! II! II! II! II! II! II!
