Primerica 2

#57. Which of the following riders would NOT cause the Death Benefit to increase?/ a) Cost of Living Rider b) Accidental Death Rider c) Payor Benefit Rider d) Guaranteed Insurability Rider

C) Payor benefit rider

#61. If an agent's license was revoked for violations of the statutes on rebating or illegal inducement, how soon after the date of revocation can the agent apply for a new license? a) 3 months b) 6 months c) 1 year d) 2 years

C) 1 year

#13. Within how many days does a licensee have to inform the Commissioner of a change of address? a) 15 b) 30 c) 45 d) 60

C) 30

#78. Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as a) Coercion. b) Rebating. c) Misleading advertising. d) Defamation.

A) coercion

#68. Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as a) Contracts of adhesion. b) Unilateral contracts. c) Aleatory contracts. d) Binding contracts.

A) contracts of adhesion

#73. A key person insurance policy can pay for which of the following? a) Costs of training a replacement b) Loss of personal income c) Workers compensation d) Hospital bills of the key employee

A) cost of training a replacement

#70. 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? a) Interest only option b) Life income with period certain c) Joint and survivor d) Fixed amount option

A) interest only option

#46. Events in which a person has both the chance of winning or losing are classified as a) Speculative risk. b) Insurable. c) Pure risk. d) Retained risk.

A) speculative risk

#23. Which of the following is an example of a producer being involved in an unfair trade practice of rebating? a) Telling a client that his first premium will be waived if he purchases the insurance policy today b) Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest c) Charging a client a higher premium for the same policy as another client in the same insuring class d) Making deceptive statements about a competitor

A) telling a client that his first premium will be waived if he purchases the insurance policy today

#31. An Adjustable Life policyowner can change which of the following policy features? a) The coverage period b) The mortality expense c) The investment account d) The insured

A) the coverage period

#32. In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? a) 1 b) 3 c) 5 d) 10

C) 5

#88. Articles of merchandise are allowed as gifts to insurance applicants as long as they do not exceed what maximum amount? a) $5 b) $10 c) $25 d) $100

B) 10$

#36. If an insurer cancels a universal life insurance policy due to the nonpayment of required premiums, how much prior notice must be given to the policyowner? a) 15 days b) 30 days c) 45 days d) 60 days

B) 30 days

#50. What is a material misrepresentation? a) Concealment b) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company c) Any misstatement made by an applicant for insurance d) Any misstatement by the producer

B) a statement by the applicant that upon discovery would affect the underwriting decision of the insurance company

#58. What does "liquidity" refer to in a life insurance policy? a) The insured receives payments each month in retirement. b) Cash values can be borrowed at any time. c) The death benefit replaces the assets that would have accumulated if the insured had not died. d) The policyowner receives dividend checks each year.

B) cash values can be borrowed anytime

#82. When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will a) Keep the premium and reject the risk on the basis that the applicant died before the policy could be issued. b) Issue the policy anyway and pay the face value to the beneficiary. c) Negotiate a reduced settlement with the beneficiary due to the unusual circumstances involved. d) Return the premium to Y's estate, since it has no obligation to pay the death claim.

B) issue the policy anyway and pay the face value to the beneficiary

#59. If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to a) Name another annuitant. b) Live at least to his life expectancy. c) Die before his life expectancy. d) Name a beneficiary.

B) live at least to his life expectancy

#69. What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy? a) Enhanced life b) Modified life c) Indexed life d) Indeterminate premium

B) modified life

#93. Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? a) Effect of inflation on income over time. b) Predicted needs of the family after the insured's death. c) Insured's current and future income. d) Insured's annual expenses.

B) predicted needs if the family after the insureds death

#76. Which nonforfeiture option provides coverage for the longest period of time? a) Accumulated at interest b) Reduced paid-up c) Extended term d) Paid-up option

B) reduced paid-up

#56. All of the following statements about equity index annuities are correct EXCEPT a) They invest on a more aggressive basis aiming for higher returns. b) The annuitant receives a fixed amount of return. c) They have a guaranteed minimum interest rate. d) The interest rate is tied to an index such as the Standard & Poor's 500.

B) the annuitant receives a fixed amount of return

#9. All of the following entities regulate variable life policies EXCEPT a) The Insurance Department. b) The Guaranty Association. c) Federal government. d) The SEC.

B) the guaranty association

#2. If an insured continually uses the automatic premium loan option to pay the policy premium, a) The insurer will increase the premium amount. b) The policy will terminate when the cash value is reduced to nothing. c) The face amount of the policy will be reduced by the automatic premium loan amount. d) The cash value will continue to increase.

B) the policy will terminate when the cash value is reduced to nothing

#96. Which of the following is NOT a goal of risk retention? a) To fund losses that cannot be insured b) To minimize the insured's level of liability in the event of loss c) To reduce expenses and improve cash flow d) To increase control of claim reserving and claims settlements

B) to minimize the insureds level of liability in the event of loss

#97. Who can make a fully deductible contribution to a traditional IRA? a) Someone making contributions to an educational IRA b) A person whose contributions are funded by a return on investment c) An individual not covered by an employer-sponsored plan who has earned income d) Anybody; all IRA contributions are fully deductible regardless of income level

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

#8. Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner? a) Paid-up options b) Extended term c) Cash surrender d) Reduced paid-up

C) cash surrender

#75. 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 a) Accelerated benefits. b) Cost of living. c) Guaranteed insurability. d) Waiver of cost of insurance.

C) guaranteed insurability

#83. 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 a) Insuring clause. b) Misstatement of Age clause. c) Incontestability clause. d) Reinstatement clause.

C) incontestability clause

#3. After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive? a) Payments for life b) Yearly premium waiver and income c) Monthly premium waiver and monthly income d) Percentage of medical costs paid by the insurer

C) monthly premium waiver and monthly income

#21. A licensed counselor MAY NOT perform which of the following duties? a) Provide opinions concerning benefits, coverage, terms, and advantages and disadvantages of a policy or annuity b) Advertise business as an insurance counselor or consultant c) Solicit business as an insurance producer d) Audit or abstract insurance policies or annuities

C) solicit business as an insurance producer

#86. Which of the following are generally NOT considered when underwriting group insurance? a) The group's past claim experience b) The size of the group c) The insureds' medical history d) The nature of the group

C) the insureds medical history

#55. What is the purpose of the buyer's guide? a) To list all policy riders b) To provide information about the issued policy c) To allow the consumer to compare the costs of different policies d) To provide the name and address of the agent/producer issuing the policy

C) to allow the consumer to compare the costs of different policies

#67. When is the earliest a policy may go into effect? a) When the insurer approves the application b) After the underwriter reviews the policy c) When the application is signed and a check is given to the agent d) When the first premium is paid and the policy has been delivered

C) when the application is signed and a check is given to the agent

#4. An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? a) No penalties, since the owner is older than 59 ½ b) 10% for early withdrawal c) 15% for early withdrawal d) 50% tax on the amount not distributed as required

D) 50% in the amount not distributed as required

#52. Which concept is associated with "exclusion ratio"? a) Dividend distribution b) How exclusion riders affect an insurance premium c) Policy provisions d) Annuity payments

D) annuity payments

#62. Circulating deceptive sales material to the public is what type of Unfair Trade Practice? a) Defamation b) Coercion c) Misrepresentation d) False advertising

D) false advertising

#54. When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income? a) Both principal and interest b) Neither principal nor interest c) Principal only d) Interest only

D) interest only

#29. Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance? a) Reinstatement rule b) Conversion rule c) Disclosure rule d) Replacement rule

D) replacement rule

#1. The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE? a) The premium value will be paid to the annuitant's estate. b) All benefits will be forfeited. c) The cash value will be paid to the state government. d) The cash value will be paid to the annuitant's estate.

D) the cash calue will be oaud to the annuitants estate