Primerica Practice Test

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

annuitant

Two business partners own life insurance on each other. If one partner dies, which of the following contracts will allow the surviving partner to use the death benefit to purchase the deceased's business interests?

buy-sell agreement

An insurance agent represents the

insurer

Which of the following types of annuities would be best suited for a retired couple who are seeking income for as long as either lives?

joint and survivor

Which settlement option guarantees an income for 2 or more recipients for as long as they live

joint and survivor

Which law is the foundation of the statistical prediction of loss upon which rates for insurance are calculated?

law of large numbers

Which type of annuity settlement stops when the annuitant dies?

life income annuity

The MIB is a nonprofit trade association that maintains

medical information on applicants for life adn health insurance

What does the payor benefit rider protect?

premium payments for a juvenile policy

If the cash value exceeds the premiums paid in a whole life policy, what are the tax consequences if the policy is surrendered

the portion that exceeds the premiums paid is taxable

Which of the following would be considered a flexible premium policy?

universal life

Which of the following annuity products requires an agent to hold a securities license?

variable annuities

All other factors being equal, which of the following types of policies will accumulate cash value at the fastest rate?

20-pay life

How long does an employee have to convert group policy coverage to an individual policy without evidence of insurability?

31 days

Betty is the only beneficiary named on her husband Bob's policy which has a Common Disaster provision. They are in a car wreck, and Bob dies instantly. Betty lives for 29 days. Who will receive the death benefit?

Bob's estate

Which of the follow is NOT a nonforfeiture option in whole life policies?

accumulation at interest

The "pay in" phase of the annuity is known as what period?

accumulation period

Which of the following features of the Equity Indexed Whole Life policy is NOT fixed?

cash value growth

What do employees covered under a group contract receive?

certificate of insurance

The receipt given to a life insurance applicant when the application is completed and the initial premium is received is called a(n)

conditional receipt

The most common type of whole life insurance where premiums are payable over the whole life of the insured to age 100 is called

continuous premium (straight) life

For an insurance contract, the principle of utmost good faith means

each party relies upon the truthfulness of the other

If an annuitant dies during the accumulation period, what will the beneficiary receive?

either the cash value or the premiums paid, whichever is greater

The policy and a copy of the application, along with any riders and amendments, is called the

entire contract

An annuity in which investment growth is dependent on the performance of an index such as the Standard and Poor's 500 is called a(n)

equity indexed annuity

Each of the following is a typical characteristic of group life insurance EXCEPT

evidence of insurability is usually required

A life settlement opinion that pays out the death benefit incrementally, in a specified amount until all of the proceeds are exhausted, is called

fixed-amount installments

An agent delivers a policy to an insured, and 9 days later the insured returns the policy and wants a complete refund. What provision covers this circumstance?

free look

The premium payment mode can be best described as the

frequency with which the policy premium will be paid

Who would be allowed catch-up contributions in a qualified plan?

individuals who are age 50 and older

To prevent people from profiting from a loss, insurers must be certain

insurable interest exists

The transfer of a possible financial loss to another party refers to

insurance

Money borrowed from the policy's cash value is

not taxable

If a licensed life insurance agent wants to sell variable life policies, what additional license must the agent obtain?

securities

An annuity that is purchased with a lump-sum payment, and that begins income payments within one year is a

single premium immediate annuity

What is the risk classification for those who are insurable, but have a higher than average risk?

substandard

Which statement is INCORRECT concerning policy dividends?

the insurer may guarantee dividends

What is the purpose of the grace period in life insurance policies

to protect the policyowner against an unintentional lapse of the policy

At what age can a participant receive distributions from a qualified plan without incurring a 10% penalty?

59.5

If a misstatement of age is discovered during the processing of a life insurance claim, what will the insurer do?

adjusts the death benefit based on the premiums that were paid

This part of the application provides information about an applicant's financial condition and character, as well as the purpose of sale and how long the agent has known the applicant:

agent's report

The legal transfer of all or part of a policyowners rights, title or interest is called a(n)

assignment

An insurer mails an insurance policy to a new policyowner. When the insurer relinquishes control of the policy, the policy is considered

delivered

Underwriting is the process of

determining the company's risk regarding a proposed insured

What type of permanent insurance allows the policyowner to pay for a policy in a specified period of time, and the policyowner does not have to make any more premium payments for the life of the policy?

limited payment

Any insurer who is NOT approved to do business in this state is considered

nonadmitted

A life insurance death benefit paid in a lump sum to a beneficiary is

not subject to any taxes

Which of the following allows an insurance company to deny coverage if the insured's death occurs in a war?

policy exclusions

An annuity is considered fixed when it does all of the following EXCEPT

provides the annuitant with an interest rate that is the lesser of the guaranteed or current rate

Statements in the application for insurance that are believed to be true to the best of the applicant's knowledge are called

representations