Primerica Test Questions
In Replacement, an existing insurer must provide policy owners with a policy summary for existing life insurance within how many days of receiving the written communication and replacement
10
What percentage of a company's employees must take part in a noncontributory group life plan
100%
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
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
A unfair trade practice
In insurance, an offer is usually made when
An applicant submits an application to the insurer
The death protection component of universal life insurance is always
Annually Renewable Term
Employer contributions made to a qualified plan
Are subject to vesting requirements
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employees are tax free
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?
Authorized
An insurance contract must contain all of the following to be considered legally binding EXCEPT
Beneficiary's consent
Which of the following is a feature of a variable annuity
Benefit payment amounts are not guaranteed
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash Option
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
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
Contacts that are prepared by one party and one submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of adhesion
The term "fixed" in a annuity refers to all of the following EXCEPT
Death benefit
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
How is the commissioner of insurance selected to be chief officer of the department of insurance
Elected to office
For a retirement plan to be qualified, it must be designed for whose benefit?
Employees
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible
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
An insurance company has published a brochure that inaccurately portrays the advantage of a particular insurance policy. What is this an example of
False advertising
At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called
Guaranteed Insurabilty
Which of the following is an eligibility requirement for all social security disability income benefits
Have attained fully insured Status
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause
A Return of Premium term life policy is written as what type of term coverage
Increasing
When a whole life 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
When a policy is being replaced, the replacing company notifies the
Replacement Company
Which of the following would help prevent a universal life policy from lapsing
Target premium
Traditional IRA contributions are
Tax deductible
The interest earned on policy dividends is
Taxable
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does that mean
The beneficiary will only receive payments of the interest earned on the death benefit
Who is the owner and who is the beneficiary on a Key Person Life Insurance Policy?
The employer is the owner and beneficiary
Who bears all of the investment risk in a fixed annuity?
The insurance company
Which of the following best describes what the annuity period is
The period of time during which accumulated money is converted into income payment
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only
The policyowner of a Universal Life policy may skip paying the premium and and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance
If an insurance premium is paid by the policyowner to the agent and the agent fails to remit that premium to the insurer, which of the following statements is true
The policy will not lapse since the payment to the agent is the same as a payment to the insurer
All of the following are true about variable products EXCEPT
The premiums are invested in the insurers general account
Under an extended term nonforfeiture option, the cash value is converted to
The same face amount as in the whole life policy
Which of the following products requires a securities license
Variable annuity
Which provision of a life insurance policy states the insurers duty to pat benefits upon the death of the insured, and to whom the benefits will be paid
Insuring Clause
Which of the following best describes the MIB
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
What two terms are associated directly with the premium
Level or flexible
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
Which of the following is NOT true regarding the accumulation period of an annuity
It would not occur in a deferred annuity
Which statement is NOT true regarding a straight life policy
Its premium steadily decreases over time, in response to its growing cash value
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
Which option for Universal Life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured
Option B
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
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early
Paid-up option
Which of the following is another term for the accumulation period of an annuity
Pay-In period
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe
Unilateral
Which of the following terms will be permissible in describing a life insurance policy in company advertisements
Variable Plan
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract
Warranty