Primerica Exam Review
All of the following statements are correct regarding credit life insurance Except
Benefits are paid to the borrower's beneficiary
A tax sheltered annuity is a special tax favored retirement plan available to
certain group of employees only
Which of the following would NOT be considered rebating?
giving a client $25 pen with the insurer's logo during the insurance application process
To become a Texas insurance agent, an individual must
have passed a licensing exam within the 12 months before applying
When a whole policy lapses or is surrendered prior to maturity the cash value can be used to
purchase a single premium policy for a reduced face amount
Which of the following best describes the aleatory nature of an insurance contract?
exchange of unequal values
Who do agents represent?
the insurance company
An individual covered under a group life insurance policy may convert the policy to any of the following except
15 year level term
In insurance, an offer is usually made when
An applicant submits an application to the insurer
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period time is known as the
Incontestability clause
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
Which of the following types of risk will result in the highest premium?
substandard risk
Which of the following must an insurer obtain in order to transact insurance within a given state?
certificate of authority
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
the beneficiary
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called
waiver of premium
Which universal life option has a gradually increasing cash value and a level death benefit?
Option A
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid up
Who bears all of the investment risk in a fixed annuity?
The insurance company
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death
An IRA purchased by a small employer to cover employees is known as a
simplified employee pension plan
A license may NOT be denied, suspended, or revoked if the licensee
submits an unsigned insurance policy application
If an annuitant dies before annuitization occurs, what will the beneficiary receive?
Either the amount paid into the plan or the cash value , whichever is the greater amount
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase
Which of the following policies would be classified as a traditional level premium contract?
Straight life
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
Sec registration
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
The primary beneficiary of her husband's life policy found that no settlement option was stated in the policy on the date of her husband's death. Who will select the settlement option in this case?
The beneficiary
All of the following are true about variable products except
The premiums are invested in the insurer's general account
Under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy
If only one party to an insurance contract has made a legally enforceable promise what kind of contract is it?
unilateral
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
If an agent suspects that insurance fraud is being committed, within how many days must the agent notify the insurance fraud unit of the department of insurance
30 days
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
An agent explains the details of a life insurance policy to a client. The agent does not realize, however, that the state has recently rewritten two of the provisions. As a result, the agent inadvertently misrepresents the policy, making it more attractive than it really is. What best describes this situation?
There is no misconduct
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
conditions
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
convertible term policy
An individual has just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?
decreasing term
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
foreign
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?
inspection report
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
limited pay whole life
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. What is the company guilty of?
misrepresentation
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled?
payor benefits
Which of the following is correct concerning the taxation of premiums in a key person life insurance policy?
premiums are not tax deductible as a business expense
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited pay life
Which of the following would be the beneficiary in credit life insurance
creditor
Which of the following would be the beneficiary in credit life insurance?
creditor
To become a Texas insurance agent an individual must
have passed a licensing exam within the 12 months before applying
Insurance policies are not drawn up through negotiations and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower echelon employees. This plan would be funded with before tax corporate and it does not meet government approval standards. This annuity plan is
a non qualified annuity plan
Which of the following explains the Policyowner's right to change beneficiaries choose options and receive proceeds of a policy?
owners right
According to the state nonforfeiture law for life insurance policies, insurers must offer at least one of the following nonforfeiture options except
reduction of premium
The premiums paid by the employer in a business life insurance policy are
tax deductible by the employer