PRIMERICA LIFE INSURANCE EXAM ACTUAL

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PRIMERICA LIFE INSURANCE EXAM ACTUAL

EXAM COMPLETE 300 QUESTIONS WITH

DETAILED VERIFIED ANSWERS (100%

CORRECT ANSWER S) / ALREADY GRADED A+

• An insured purchased an insurance policy 5 years ago. Last

year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

• mutual
• reciprocal
• nonprofit service organization
• stock

Correct answer: a. mutual

Explanation: Mutual insurance companies are owned by

policyholders, and they may return excess funds (dividends) to policyholders when claims and operating costs are less than collected premiums. These dividends are not taxable as they are considered a return of overpaid premiums. If all funds are paid out, no dividends are distributed, which explains why no check was received this year.

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• Following a career change, an insured is no longer required to

perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning.The insured has also eliminated most fatty foods from his diet.Which method of dealing with risk does this scenario describe?

• retention
• reduction
• transfer
• avoidance

Correct answer: b. reduction

Explanation: Risk reduction involves taking steps to lessen the

likelihood or severity of a loss. The insured’s lifestyle changes (exercise and diet) reduce the chances of health-related issues, thus reducing risk.

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• In insurance, an offer is usually made when
• an applicant submits an application to the insurer

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• the insurer approves the application and receives the initial

premium

• the agent hands the policy to the policyholder
• an agent explains a policy to a potential applicant

Correct answer: a. an applicant submits an application to the

insurer

Explanation: In insurance, the offer is typically made by the

applicant through the submission of an application. The insurer’s acceptance occurs when the underwriter approves it and issues the policy.

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• The causes of loss insured against in an insurance policy are

known as

• perils
• losses
• risks
• hazards

Correct answer: a. perils

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Explanation: Perils are specific events or causes of loss (e.g.,

fire, theft) that an insurance policy covers.

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• What documentation grants express authority to an agent?
• agent’s contract with the principal
• agent’s insurance license
• fiduciary contract
• state provisions

Correct answer: a. agent’s contract with the principal

Explanation: Express authority is explicitly granted to an agent

through the agent’s contract with the insurer (principal).

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• Which of the following best describes an insurance company

that has been formed under the laws of this state?

• domestic
• sovereign
• alien