Primerica Life Insurance Exam 2023 Guaranteed Pass,you should study this

Primerica Life Insurance Exam 2023

Guaranteed Pass,you should study this

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 Answer- 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 Answer- 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 Answer- A. an applicant submits

an application to the insurer

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 Answer- 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 Answer- 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 Answer- 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?

a. medical history

b. sex

c. age

d. race Answer- 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 Answer- 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 Answer- 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 Answer- D. adhesion

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 Answer- 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 Answer- 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 Answer- D. consideration

consideration is something of value that each party gives to the other. The consideration

on the part of the insured is the payment of premium and the representations made in

the application

which of the following would qualify as a competent party in an insurance contract?

a. the applicant is intoxicated at the time of application

b. the applicant is 12 year old student

c. the applicant is under the influence of a mind-impairing medication at the time of

application

d. the applicant has a prior felony conviction Answer- D. the applicant has a prior

felony conviction

when an insurer and insured enter into a contract, both parties must be legal of age and

mentally competent. It is legal for a person convicted of a felony to buy an insurance

contract. An intoxicated person, however, may not be mentally competent, a 12 year old

student is considered to be underage in most states and a person under mind-impairing

medication most likely would not be mentally competent

an insurer neglects to pay a legitimate claim that is covered under the terms of the

policy. Which of the following insurance principles has the insurer violated?

a. representation

b. adhesion

c. consideration

d. good health Answer- C. consideration

the binding force in any contract is consideration. consideration on the part of the

insureds the payment of premiums and the health representations made in the

application. Consideration on the part of the insurer is the promise to pay in the even of

loss

which of the following is a primary source of information used for insurance

underwriting?

a. application

b. applicant interviews

c. medical records.

d. private investigations Answer- A. application