Primerica Life Insurance 2023/ 2024 Exam | (Questions and 100% Verified Answers) Correct
1. An applicant wants to buy a policy that has cash value element... [Show More] . Which type should she buy?
a. term
b. permanent
c. stock
d. investment
Answer: b. permanent- death protection and savings/cash value option
2. What are the personal uses of life insurance?
a. insured protection, estate creation and cash accumulation
b. cash accumulation, estate depletion and liquidity
c. beneficiary protection, liquidity, estate creation and cash accumulation
d. survivor protection, estate creation and conservation, cash accumulation and liquidity
Answer: d. survivor protection, estate creation and conservation, cash accumulation and liquidity
3. Which of the following best details the underwriting process for life insurance?
a. reporting and rejection of risks
b. selection, classification, and rating of risks
c. solicitation, negotiation and sale of policies
d. issuance of policies
Answer: b. selection, classification, and rating of risks-the underwriting process is accomplished by reviewing and evaluation information about an applicant and applying what is known of the individual against the insurer's standards and guidelines for instability and premium rates.
4. Which of the following types of risk will result in the highest premium?
a. substandard risk
b. standard risk
c. preferred risk
d. all risks pay equal premiums
Answer: a. substandard risk-under average insurance risk due to physical condition, personal or family history of disease, occupation, habits or hobbies. This rating incurs the highest premium if policy is issued.
5. A key person insurance policy can pay for which of the following?
a. workers compensation
b. hospital bills of the key employee
c. costs of training a replacement
d. loss of personal income
Answer: c. costs of training a replacement- the policy will pay for costs of running the business and replacing the employee
6. What qualifications must an agent hold in order to sell variable life insurance policies?
a. National Association of Insurance Commissioners (NAIC) registration
b. state licensing to sell life insurance and variable products
c. both state and federal licensing
d. same certification as fixed life policies
Answer: c. both state and federal licensing-agents selling variable life products must be registered with the Financial Industry Regulatory Authority (FINRA) and must be licensed within the state to sell life insurance and variable products
7. Which of the following may NOT be included in an insurance company's advertisement?
a. their policies' limitation or exclusions
b. the name of the specific agent
c. an identification of a limited policy as a limited policy
d. that its policies are covered by a state Guaranty Association
Answer: d. that its policies are covered by a state Guaranty Association-that is illegal for insurers to state that their policies are guaranteed by the existence of a Guaranty Association
8. A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy?
a. level
b. variable
c. solid
d. fixed
Answer: d. fixed- life insurance policies offer minimum guaranteed or fixed benefits stated in the contract. the other type of policy, variable life, varies in its cash value because its value is based on the stocks that support it
9. Which of the following is NOT true?
a. the Life and Health Guaranty Association is comprised of representatives from the DOIs of every state
b. the Association's liability is generally limited to that of the impaired instance company
c. the Life and Health Guaranty Association's maximum coverage is $500,000
d. the Life and Health Guaranty Association was created to protect policy owners financially if their insurers become insolvent
Answer: a. the Life and Health Guaranty Association is comprised of representatives from the DOIs of every state-any company selling life and/or health insurance must belong to the Guaranty Association, not the DOI representatives
10. An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? [Show Less]
