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