Primerica Practice Life Exam

The legal definition of "person" would NOT include which of the following?

A family

Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?

A minor son of the insured

Any insurance agent who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

Be fined a sum of $1,000.

Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity?

Guaranteed Lifetime Withdrawal

Insurance is a contract by which one seeks to protect another from

Loss. Insurance will protect a person, business or entity from loss.

Which of the following is the best reason to purchase life insurance rather than annuities?

To create an estate

What is the minimum free-look period for newly issued life insurance policies in this state?

10 days

An applicant for insurance is requesting more information from her agent about a claim that is currently being settled. Within what time period must the agent respond?

15 days

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal?

8

A tornado that destroys property would be an example of which of the following?

A peril

Which of the following is NOT an allowable 1035 exchange?

A whole life insurance policy is exchanged for a term insurance policy.

In an annuity, the accumulated money is converted into a stream of income during which time period?

Annuitization period

Any insurer who engages in the insurance business and violates the Code with respect to insurance replacement shall on the first violation

Be fined a sum of $10,000.

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only.

A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?

Cost of Living Rider

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

Which of the following terms is defined by the California Insurance Code as unassigned funds that must be reported on a stock insurer's annual statement?

Earned surplus

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

Stranger-originated life insurance policies are in direct opposition to the principle of

Insurable interest.

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

Interest only option

What is the main purpose of the Seven-pay Test?

It determines if the insurance policy is a MEC.

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single Life

What is the term for a sales campaign conducted through the mail?

Solicitation conducted through the mail is one method of direct-response marketing.

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association.

The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?

The annuitant must be a natural person.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

The benefit is received tax free.

Which of the following is NOT a characteristic of pure risk?

The loss must be catastrophic.

What is the penalty for IRA distributions that are below the required minimum for the year?

50%

What does "liquidity" refer to in a life insurance policy?

Cash values can be borrowed at any time.

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident?

Common Disaster Clause

The key factor of representation that allows the injured party to rescind the contract is

If the representation is false in a material point.

A Return of Premium term life policy is written as what type of term coverage?

Increasing

If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?

Lump sum

According to California Insurance Code, which of the following can be classified as an insurable event?

Pure risks

An insured committed suicide one year after his life insurance policy was issued. The insurer will

Refund the premiums paid.

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner.

Which of the following is NOT the consideration in a policy?

The application given to a prospective insured

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT

Value funds.

For a retirement plan to be qualified, it must be designed for the benefit of

Employees.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Signed waiver of premium.

An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called

Single premium whole life.

A life insurance application is asking if the applicant has applied for any other life insurance within the past 6 months. The applicant states that he applied for $15,000 coverage from XYZ Co., but fails to mention the $150,000 coverage with DEF Co. The applicant is guilty of

Concealment.

All of the following are examples of risk retention EXCEPT

Premiums.

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.

When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?

They can convert their coverage to permanent life insurance without evidence of insurability.

In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Executive is the owner, and the executive pays the premium.

Which of the following is NOT fundable by annuities?

Death benefits