Primerica Exams

A stock insurer is defined as an insurer

owned by its stockholders

If an individual willfully violates provisions of the Fair Credit Reporting Act, what is the maximum civil penalty?

$2,500

No foreign insurer is authorized to transact insurance in Wyoming, unless that insurer has been issuingits own policies, in its state of domicile. for at least

2 years

An agency intends to adopt substantive rule changes. In order for a hearing regarding this change to take place, how many individuals must request it?

25

Within how many years is an insured able to reinstate his or her annuity contract after defaulting on payments, provided the cash surrender value has not been paid?

3 years

When a licensed insurance producer places insurance business with an insurer that has not appointed the producer, he/she is deemed to be acting as

A broker

Which of the following is NOT required in every individual policy or group certificate of credit life insurance?

A list of included provisions on the first page

What guarantees that the information explained in the insurance contract is true?

A warranty

To purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called?

Insurable interest

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent

Who are members of the Wyoming Insurance Guaranty Association?

Insurance companies licensed to do business in Wyoming

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insuring clause

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured and to whom the benefits will be paid?

Insuring clause

The interest earned on policy dividends is

Taxable

Which of the following is required to be included in each individual policy or group certificate of credit life insurance?

The insurer's name and home office address

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy

What is the advantage of reinstating a policy instead of applying for a new one?

The original age is used for premium determination

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

All of the following are true of key person insurance EXCEPT

The plan is funded by permanent insurance only

All of the following statements about indexed whole life insurance are correct EXCEPT

The policy face amount remains level throughout the life of the policy

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?

They are tax free to terminally ill insured

SIMPLE Plans require all of the following EXCEPT

At least 1,000 employees

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies

The renewable provision allows the policyowner to renew the coverage at the expiration date

Without evidence of insurability

According to the law of agency, insurance producers represent

insurers

Cash value guarantees in a whole life policy are called

nonforfeiture values

Contributions to Roth IRAs are

not tax deductible

How much will a producer be fined for each Violation of a final order from the Commissioner?

$5,000

An annuity has accumulated the cash value of $70,000, of which $30,000 is from premium payments. The annuitant dies during the accumulation phase. The beneficiary will receive

$70,000

How long is a reinstatement period for variable life policies?

1 year

The Commissioner would like to revoke a consultant's license. How many days written notice must she provide to the consultant?

10

The Commissioner issued a cease and desist order. The person affected by this order would like to request a hearing. How long does he have to make this request?

10 days

In a noncontributory group policy

100% of eligible employees must participate

In order to transact insurance in Wyoming, foreign insurer must have issued policies in its state of domicile for at least

2 years

How many continuing education credit hours must be completed each reporting period?

24

An insurer must notify the commissioner in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?

3 days

How many hours of continuing education must be dedicated to ethics?

3 hours

When replacement is involved, how long must an insurer maintain copies of all sales proposals used in the transaction?

3 years

If an insurer wishes to cancel or not renew an appointment, they must notify the producer and Commissioner within

30 days

If an insurer wishes to cancel or not renew an appointment, they must notify the producer and commissioner within

30 days

During policy replacement, the replacing insurer must notify existing insurers within what time period?

5 business days

*Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to

6 months

Fow how long is an insurance company allowed to defer policy loan requests

6 months

Policy loans requests, except for loan requests for payment of due premiums, may be deferred for a period of up to

6 months

A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within

60 days

A life insurance policy qualifies as a Modified Endowment Contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?

7 years

Fraternal benefit societies must meet social requirements before they are permitted to transact insurance. Which of the following is NOT among these requirements?

A bond of $100,000

The entire contract includes all of the following EXCEPT

A buyer's guide

Which of the following best describes a rebate?

A producer returning part of her commission to her client, as an inducement to buy

Which of the following is a requirement in variable contracts delivered in this state?

A statement that the dollar amount will vary with investment experience

Sticky, you are stuck with the application

Adhesion

Who acts on behalf of the principal?

Agent

Which of the following would NOT be a violation of state insurance regulations?

Agent C uses her license to write only business other than controlled

An exchange of unequal values, the premium is smaller than the death benefit

Aleatory

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?

An accidental death rider

Who can make a fully deductible contribution to a traditional IRA?

An individual not covered by an employer-sponsored plan who has earned income

The death protection component of Universal Life Insurance is always

Annually Renewable Term

Which of the following indicates the person upon whose life the annuity income amount is determined?

Annuitant

Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?

Automatic premium loan option

Which of the following would NOT trigger the payment of Accelerated Death Benefits?

Being permanently disabled

Which of the following is NOT an indicator of a competent party?

Business profession

An IRA contribution can be made from which of the following?

Cash

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Certain conditions must be met

Conditional

Which of the following would be considered an illegal inducement to purchase insurance?

Confirming future dividends in a life insurance proposal

An exchange of something of value, the insured pays the premium the insurer pays the death benefit

Consideration

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?

Consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Which of the following elements of an insurance contract requires payment of premium?

Consideration

A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will

Continue to increase

Which of the following statements is true regarding SIMPLE plans?

Contributions and earnings are tax-deferred until funds are withdrawn

An insurance producer just sold an insurance policy to his sister. What kind of business is this?

Controlled

When an individual obtains an insurance license for the primary purpose of writing insurance on him or herself, or for members of his or her immediate family or business, this is called

Controlled business

An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?

Currently insured

An individual has just borrowed $10.000 from his bank on a 5-year investment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

During policy solicitation, an insurer exaggerates the financial condition of one of its competitors, and makes it sounds worse than it is. This is an example of an unfair trade practice of

Defamation

All of the following could be considered rebates if offered to an insurance in the sale of insurance EXCEPT

Dividends from a mutual insurer

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

Dividends from a mutual insurer

An adjustable life policy can assume the form of

Either term insurance or permanent insurance

When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as

Estate conservation

How often must an insurer issuing individual variable contracts providing benefits in variable amounts mail a statement reporting the investments held in the separate account to the contract holder?

Every year

Which of the following would NOT be eligible for group life insurance?

Family groups

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

Which of the following is a correct statement about annuities?

Fixed annuities do not provide protection against inflation

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

Have attained fully insured status

Fixed annuities provide all of the following EXCEPT

Hedge against inflation

Under which of the following conditions would life insurance proceeds be taxable by the federal government?

If there is a transfer for value

If a loan request is for payment of due premiums on the policy, how soon must the insurer issue a loan?

Immediately

All of the following are excluded from the rules of replacement EXCEPT

Individual whole life policies

Who would be allowed catch-up contributions?

Individuals age 50 or older

All of the following are examples of violations of replacement EXCEPT

Insisting that an applicant answer questions honestly

All of the following are examples violations of replacement EXCEPT

Insisting that an applicant answers questions honestly

Death benefits must be paid within 45 days of receipt of proof of loss and must include

Interest accrued from the date of death until date of payment

Which of the following best describes a misrepresentation?

Issuing sales material with exaggerated statements about policy benefits

All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT

It does not have a guaranteed death benefit

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and Survivor

For a contract to be enforceable by law, the purpose of the contract must be

Legal and not against public policy

An annuitant pays the annuity premium on the 14th of each month. Which of the following best describes this arrangement?

Level

Which of the following is a licensing requirement for producers soliciting variable contracts in this state?

License to transact variable life insurance

Which of the following terms describes individuals authorized by the Commissioner to transact limited lines insurance?

Limited lines producers

Which of the following is guaranteed under a variable whole life insurance policy?

Maximum death benefit

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

An insurance company that is owned by the policyholders is called a

Mutual insurer

In the evnt an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the

Named beneficiary

Replacement rules do not apply in all of the following situations EXCEPT

Non of the above. Replacement rules do not apply in any of the above situations.

cash value guarantees in a whole life policy are called

Nonforfeiture values

All of the following would be considered an insurance transaction EXCEPT

Obtaining an insurance license

An insured has a life insurance policy from a participating company and receives quarterly dividends. he has instructed the company to apply the policy dividends to increase the death benefit. the dividend option that the insured has chosen is called

Paid-up additions

When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

Paid-up additions

Which dividend option will increase the death benefit?

Paid-up additions

Key person insurance can provide protection for all of the following economic losses to a business EXCEPT

Pay the death benefit to the estate of the insured

Which of the following is consideration on the part of an insurer?

Paying a claim

A married couple purchase a life insurance policy on their newborn baby. They are concerned about what will happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy riders should their agent recommend?

Payor benefit

A married couple purchase a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent recommend?

Payor benefit

An Equity Indexed Annuity will grow based upon

Performance of a recognized index

All of the following statements about mutual insurance companies are correct EXCEPT

Policy dividends issued by mutual companies are guaranteed and not taxable

What is the difference between a straight life policy and a 20-pay whole life policy?

Premium payment period

Another name for a substandard risk classification is

Rated

What does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

Which of the following statements regarding HIV testing is NOT true?

Test results must be sent to the Department of Insurance

Variable life insurance is regulated by all of the following entities EXCEPT

The U.S. Department of Treasury

Who is required to pay the fee for an insurance agent's appointment?

The appointing insurer

With Adjustable Life, the owner can change all of the following EXCEPT

The insured

Which of the following bears the investment risk in a variable life policy?

The policyowner

All of the following are true of the Survivorship Life Policy EXCEPT

The premium is based on the age of each insured

All of the following are requirements for life insurance illustrations EXCEPT

They must be part of the contract

An application for life insurance usually requires the agent to ask if the proposed insurance will replace an existing life insurance policy. All of the following are purposes for obtaining this information EXCEPT

To ensure that at least three companies are involved so the policyowner gets competitive prices.

What is the justification for the existence of the State Insurance department?

To protect the public

Which of the following is NOT a responsibility of the replacing insurer in life insurance policy replacement?

To read the notice regarding replacement to the applicant

An agent who knowingly misrepresents material information for the purpose of inducing an insured to lapse, forfeit, change or surrender a life insurance policy or annuity has committed an illegal practice known as

Twisting

A one sided promise, the insurance companies promise to pay the death benefit

Unilateral

Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?

Use it for emergency expenses

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable whole life

All of the following benefits are available under Social Security EXCEPT

Welfare benefits

An insured has a life policy in the amount of $250,000 naming his wife as the beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for some time. When she finally receives the death benefit check, it's in the amount of $250,530. Is any portion of the proceeds that the beneficiary receives taxable?

Yes, proceeds in excess of face amount are taxable as interest

An insurance company is declared insolvent on May 1. A policyholder is in an accident on May 15 and files a claim on May 20. Will this accident be covered?

Yes; the claim was made within the 30-day period after the company was declared insolvent

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with accelerated benefits rider. Which of the following is true regarding taxation of the accelerated benefits?

A portion of the benefit up to a limit is tax free; the rest is taxable income

Within how many days must the Commissioner approve or disapprove policy forms for all policies, certificates of insurance, notices of proposed insurance, applications for insurance, endorsements and riders?

30

How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?

30 days

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

The highest percentage of "controlled business" that a licensed agent is allowed to write is

50% of their annual aggregate premium

Why is an equity indexed annuity considered to be a fixed annuity?

It has a guaranteed minimum interest rate

Which of the following is TRUE regarding the annuity period?

It may last for the lifetime of the annuitant

Which of the following statements about the reinstatement provision is true?

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated

A credit life policy was terminated before the maturity date of the indebtedness. what will most likely happen with the amount paid by the debtor for the insurance?

It will be refunded to an entitled party

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Level Term

Which two terms are associated directly with the premium?

Level or flexible

Policies written on a third-party ownership basis are usually written to cover which of the following?

Policyowner's minor children or business associates

What is the term for the entity that an agent represents regarding contractual agreements with third parties?

Principal

Which type of insurance is based on mutual agreements among subscribers?

Reciprocal insurance

A producer in another state wants to become a producer in Wyoming. The other state gives the same privileges to Wyoming producers wanting to be licensed in that state as it does its own producers. Wyoming therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?

Reciprocity

A transaction where new life insurance is purchased, and as part of the transaction, existing life insurance is lapsed or surrendered, is known as

Replacement

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement option

All of the following would be different between qualified and nonqualified retirement plans EXCEPT

Taxation on accumulation

When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a

Term rider

Which of the following statements concerning the Medical Information Bureau is correct?

The Medical Information Bureau assists underwriters in evaluating and classifying risks.

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner

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 consideration in an insurance policy EXCEPT

The cash value in the policy

Which of the following is TRUE regarding the insurance amount in a credit life policy

The creditor can only insure the debtor for the amount owed

All of the following are true about Group Life Insurance EXCEPT

The employer is the beneficiary

All of the following are advantages of a qualified retirement plan EXCEPT

The income at retirement is tax free

The insurer of a credit life policy requires evidence of insurability from the debtor. The debtor becomes obligated to the creditor on March 1st, and the evidence of insurability is provided to the insurer on March 30th. When will the term of insurance begin?

Whenever the insurer finds the evidence of insurability satisfactory

An insurance company is declared insolvent on May 1. A policyholder is in an accident on May 15th and files a claim on May 20. Will this accident be covered?

Yes; the claim was made within the 30-day period after the company was declared insolvent