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