primerica exam 2

C. Premiums

all of the following are examples of risk retention EXCEPT? A. co-payments B. Self-insurance C. Premiums D. deductibles

representation

statements are true to the best of the applicants knowledge

D. 5yrs Ech. Agent and agency must keep a file of all advertising printed published or prepared for 5yrs

for how many years is insurer required to maintain a complete file of its advertisements

cash value the amount available to the policyowner for a loan is the policies cash value. If there are any outstanding loan that amount will be reduced by the amount of the unpaid loan interest

what limits the amount of policy owner can borrow from the whole life insurance policy

A. Option B

which option for universal life allows the beneficiary to collect both the death benefit and cash value apon the death of the insured? A. option B B. Corridor option C. Variable option D. Option A

D. Other insurance coverage Part II of the application contains questions regarding the applicants health history. Part I of the application incluudes questions regarding current coverage being applied for as well as any insurance coverage with the same or other insures.

Part II of the application provides questions regarding all of the following EXCEPT? A. family health history B. alcohol and tobacco consumption C. recent surgeries D. other insurance coverage

B. ownership mutual company are owned by policyholders while stock companies are owned by stockholders

what is the major difference between a stock company and a mutual company? A. Types of ppolicies B. Ownership C. Amnt. Of death benefit D. Number of producers

D. It is Level Term insurance

which of the following best describes annually renewable term insurance? A. it requires proof of insurability at each renewal B. Neither the premium nor the death benefit is affected by the insureds age C. It provides annually increasing death benifits D. It is level Term insurance

C. warranty a warranty for insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract the statements he or she makes are generally not warranties but representations.

which of the following is a statement that is guaranteed to be true and if untrue May breach insurance contract

D. 3% insurance companies promise guaranteed minimum on the fixed annuities ( 3% in this scenario) this means that if the investments draw less than 3 % the company will have to pay 3 percent anyway. if the investments earn 3 % the company will pay the excess.

an insurance company forwards fixed annuity premium to their general account, where the money is invested. The guaranteed minimum interest is 3%. During an economic downswing the investments only drew 2.5 % what interest rate will the insurance pay to the policy holders. A. 3% this payment. The overpayment this timewill be subtracted from the next time the rate exceeds 3 % B. 3% regardless of what the investment Dr since that's the guaranteed rate C. 2.5% D. 3%

C. a limited pay policy

a policy owner of an adjustable life policy can increase premium payments and have which of the following? A. a higher cash value interest rate B.a higher face amount without proof of insurability C.a limited pay policy D.a lower nonforfeiture option

B. avoidance

the risk management technique that is used to prevent a specific loss by not exposing yourself too that activity is called? A. sharing B. avoidance C. transfer D. reduction

B. until the beneficiary death

how long will the beneficiary receive payments under the single life settlement option A. Until the insureds age 100 B. Until the beneficiary's death C. Until the beneficiary's death D. For a specific period of time

D. it provides income the beneficiary cannot outlive the single life option provides a single beneficiary income for the rest of his or her life upon the death of the beneficiary the payments stop

which of the following is true regarding a single life settlement option? A. payments continue until the entire principal is exhausted B. proceeds are paid out in a lump sum C. it provides income for Pa specific Period of time D. it provides income the beneficiary cannot outlive

D.non participating policy In a nonparticipating the policy pays dividends not to policy owner as with (mutual insurers) but to stockholders (stock insurers)

a policy that does not pay dividends to policy owner is a? A. participating policy B. whole life policy C. mutual life policy D. not participating policy

D. Insurer While acting under the authority of the contract given by the insurer, the acts of an agent/producer are considered to be the acts of the insuer.

When agents are acting within the scope of their contract, their actions will be assumed to be acts of the A. Policy owner B. Department of Insurance C. Insured D. Insurer

D. the spouse of a retiring insurance producer

a temporary producer license could be issued without examination to all the following EXCEPT? A. the spouse or legal representative of a deceased insurance producer B. the designee of a licensened insurance producer who enters active duty in the US Armed Forces C. the employee of a disabled licensed a producer D.the spouse of a retiring insurance producer

D. set premium rate the insurer sets premium rates upon underwriting consideration

the ownership provision entitles the policyowner to do all the following EXCEPT A. receive a policy loan B. assigned the policy C. designate a beneficiary D. Set premium rates

C. Universal Life option A universal life aoption A (level death benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.

which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit. A. Equity Indexed Universal Life B. Variable Universal Life C. Universial life option A D. Universial Life Option B

D. 15 days

if an insurer wishes to appoint a producer it must file a notice of appointment within how many days of the date that the contract is executed

A. The aggent should change an incorrect stament on the application by personally initialing next to the correct statement

Which of the following is INCORRECT regarding the agents duties and responsibilities at the time of the application. A. The aggent should change an incorrect statement on the application by personally initialing next to the correct statement B. the agent should explain the nature and type of any receipt he/she is giving to the applicant. C. The applicant should make sure there are no unanswered questions on the application. Any changes to information on an application must be initialed by the applicant.

B. if the primary beneficiary predeceases the insured

an individual purchased a life insurance policy on his life naming his wife is primary beneficiary, and their daughter as contingent beneficiary. under what circumstance could the daughter collect the death benefit. A. if the insured dies from an accident B. if the primary beneficiary predeceases the insured C. the primary and contingent beneficiaries share death benefits equally

B. represent the client an agents license authorizes the licensee to represent the insuer not the client

and insurance agents responsibilities include: all of the following EXCEPT A. perform professionally B. represent the client C. perform faithfully D. represent the insuer

Retention

planned assumption of risk or acceptance of responsibility for the lossb by an insured through the use of deductibles, co-payments or self insurance

C. Limited pay policy

the policy owner of an adjustable life policy can increase premium payments and have which of the following? A. a higher cash value interest rate B. a higher face amount without proof of insurability C. Limited pay policy D. a lower nonforfeiture

D. The insurers guaranteed minimum rate of interest with fixed annuities the company is required to pay at least a guaranteed minimum rate of interest to the owners if the company investments perform well the company will pay a higher interest rate but since the interest rate can never fall below the guaranteed minimum that's what ultimately determines what the company will pay

which of the following ultimately determines the interest rate pay to the owner of a fixed annuity. A. investment performance of the company B. investment performance of the insured C. statewide predetermined annual interest rate D. Insurers guaranteed minimum rate of interest