Primerica

#16. What documentation grants express authority to an agent? a) Agent's contract with the principal b) Agent's insurance license c) Fiduciary contract d) State provisions

A) agents contract with the principal

#6. Which of the following would require an individual to stop participating in a specific activity if the Commissioner believes to be violating the Insurance Code? a) Cease and desist order b) Stop action order c) Restriction of authority d) Suspension of authority

A) cease and desist order

#20. ABC insurance company receives an incomplete application and issues the policy anyway. Six months later ABC realizes the missing information. What term is used that prevents ABC from forcing the policyowner to answer further questions? a) Estoppel b) Adhesion c) Unilateral d) Consideration

A) estoppel

#67. Which of the following is the basis for a claim against an insurance policy? a) Loss b) Material change c) Hazard d) Misrepresentation

A) loss

#52. If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a) Nonforfeiture option. b) Guaranteed insurability rider. c) Paid-up additions option. d) Cost of living provision.

B) guaranteed insurability rider

#62. An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true? a) The cost of coverage paid by the employer is tax deductible by the employees. b) The cost of coverage is a deductible expense by the employer. c) The value of insurance will be deducted from the employees' compensation. d) The cost of coverage paid by the employer is taxed to the employees.

B) the cost of coverage is a deductible expense by the employer

#60. In terms of parties to a contract, which of the following does NOT describe a competent party? a) The person must be mentally competent to understand the contract. b) The person must have at least completed secondary education. c) The person must not be under the influence of drugs or alcohol. d) The person must be of legal age.

B) the person must have at least completed secondary education

#5. Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as a) False advertising. b) Coercion. c) Rebating. d) Twisting.

C) Rebating

#34. Which of the following statements about group life is correct? a) The group sponsor receives a Certificate of Insurance. b) The policy can be converted to an individual term insurance policy. c) The cost of coverage is based on the ratio of men and women in the group. d) The premiums are higher than in an individual policy because there is no medical exam.

C) the cost of coverage is based on the ratio of men and women in the group

#1. All of the following are requirements for life insurance illustrations EXCEPT a) They must identify nonguaranteed values. b) They must differentiate between guaranteed and projected amounts. c) They must be part of the contract. d) They may only be used as approved.

C) they must be part of the contract

#95. Which of the following is the best reason to purchase life insurance rather than annuities? a) To create regular income payments b) To liquidate a sum of money over a lifetime c) To create an estate d) To liquidate a sum of money over a period of years

C) to create an estate

#24. An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have? a) Term life b) Limited pay c) Universal life d) Adjustable life

C) universal life

#94. How long will the beneficiary receive payments under the single life settlement option? a) For a specified period of time b) Until the insured's age 100 c) Until the beneficiary's death d) Until the insured's death

C) until the beneficiary's death

#78. If an insurance agent has made a misrepresentation or incomplete comparison of policies for the purpose of inducing a potential client to purchase an insurance policy, the agent may be assessed a fine of up to a) $100 b) $500 c) $1,000 d) $2,000

D) 2,000$

#12. An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable? a) $50,000 b) $18,000 c) $15,000 d) $3,000

D) 3,000

#50. When must an IRA be completely distributed when a beneficiary is not named? a) Due date of beneficiary's tax return including extensions. b) December 31 of the year following the year of the owner's death. c) Due date of the deceased owner's final tax return including extensions. d) December 31 of the year that contains the fifth anniversary of the owner's death.

D) December 31 if the year that contains the fifth anniversary of the owners death

#48. In insurance transactions, fiduciary responsibility means a) Maintaining a good credit record. b) Being liable with respect to payment of claims. c) Commingling premiums with agent's personal funds. d) Handling insurer funds in a trust capacity.

D) handling insurer funds in a trust capacity

#74. During replacement of life insurance, a replacing insurer must do which of the following? a) Guarantee a replacement for each existing policy b) Designate a new producer for a replaced policy c) Send a copy of the Notice Regarding Replacement to the Department of Insurance d) Obtain a list of all life insurance policies that will be replaced

D) obtain a list of all life insurance policies that will be replaced

#43. When calculating the amount a policyowner may borrow from a variable life policy, what must be subtracted from the policy's cash value? a) The face amount b) Mortality costs c) The cash surrender amount d) Outstanding loans and interest

D) outstanding loans and interest

#32. When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to a) Purchase a term rider to attach to the policy. b) Pay back all premiums owed plus interest. c) Receive payments for a fixed amount. d) Purchase a single premium policy for a reduced face amount.

D) purchase a single premium policy for a reduced face amount

#11. Another name for a substandard risk classification is a) Controlled. b) Declined. c) Elevated. d) Rated.

D) rated

#90. Which two terms are associated directly with the way an annuity is funded? a) Increasing or decreasing b) Immediate or deferred c) Renewable or convertible d) Single payment or periodic payments

D) single payment or periodic payments

#97. Which of the following policies would be classified as a traditional level premium contract? a) Adjustable Life b) Universal Life c) Variable Universal Life d) Straight Life

D) straight life

#65. Which of the following would provide an underwriter with information concerning an applicant's health history? a) The Medical Information Bureau b) A medical examination c) The agent's report d) The inspection report

A) the medical information bureau

#73. Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT a) The loss produced by the risk must be definite. b) The loss may be intentional. c) The loss must not be catastrophic. d) There must be a sufficient number of homogeneous exposure units to make losses reasonably predictable.

B) the loss may be intentional

#85. The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? a) $0 b) $50,000 (50% of the policy value) c) $100,000 d) $300,000 (triple the amount of policy value)

C) $100,000

#40. Which of the following will NOT be an appropriate use of a deferred annuity? a) Creating an estate b) Accumulating retirement funds c) Accumulating funds in an IRA d) Funding a child's college education

C) creating an estate

#84. Which of the following best describes the aleatory nature of an insurance contract? a) Ambiguities are interpreted in favor of the insured b) Policies are submitted to the insurer on a take-it-or-leave-it basis c) Exchange of unequal values d) Only one of the parties being legally bound by the contract

C) exchange if unequal values

#28. Which of the following best describes the MIB? a) It is a member organization that protects insured against insolvent insurers. b) It is a rating organization for health insurance. c) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. d) It is a government agency that collects medical information on the insured from the insurance companies.

C) it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance