PSI Practice Exam – Life Insurance
Questions and Answers Rated A+
For an individual long-term care policy there is an annual dollar limit for tax deductions that is
based on which of the
following?<\/p>\n\n\n\n
Which part of an insurance contract contains the promise to pay losses covered by the policy in
exchange for the
insured’s premium and compliance with policy terms?<\/p>\n\n\n\n
PSI Life Exam Questions and Answers
100% Pass
What kind of retirement plan can a 75-employee for profit corporation establish? \u2714\u2714Simple
IRA
The taxable portion of a monthly income benefit paid during the annuity phase from a
nonqualified annuity is calculated using the \u2714\u2714Exclusion ratio
Unfair claims settlement methods and practices by an insurance company include all of the
following acts EXCEPT \u2714\u2714failure to pay all claims that are reported within 90 days after a loss
occurs
The settlement option that allows proceeds to remain with the insurer and the earnings to be paid
to the beneficiary on a monthly basis is called \u2714\u2714Interest only
Regulations on life insurance advertising apply to which of the following insurance company
materials? \u2714\u2714A radio commercial that promotes the benefits of a specific company’s life
insurance products<\/p>\n\n\n\n
An insurance company may contest a life policy within a MAXIMUM of how many years after
the policy’s effective date? \u2714\u27142
All of the following factors are used in life insurance premium determination EXCEPT
\u2714\u2714Morbidity
The authorization used to obtain the applicant’s medical information that will be used by the
insurer for the primary purpose of determining eligibility must include: \u2714\u2714the time frame in
which the insurer must release the eligibility decision to the agent
An intermediary who omits information on an insurance application without the applicant’s
knowledge and submits the application to the insurer may be guilty of: \u2714\u2714Misrepresentation
Dividends are NOT subject to taxation because \u2714\u2714Paying dividends is equivalent to returning a
premium
The XYZ Insurance Company cancels an intermediary’s contract. XYZ could be bound by the
intermediary’s later acts if it: \u2714\u2714Continues to pay the intermediary deferred commissions<\/p>\n\n\n\n
Which of the following products is designed to pay benefits that can provide a stream of
retirement income to the purchaser? \u2714\u2714tax-deferred growth
Which of the following guarantees that the annuitant CANNOT outlive their benefits?
\u2714\u2714Guaranteed lifetime withdrawal benefit
Which of the following statements is CORRECT about an insured’s failure to report a claim in a
timely manner based on the advice of an intermediary? \u2714\u2714It does not affect the insurance
company’s obligations
In Wisconsin, an “intermediary” is defined as a representative of: \u2714\u2714A Solicitor
All of the following statements regarding a group annuity are correct EXCEPT \u2714\u2714Each
employee signs and receives an individual contract
Statements by an application concerning personal health history, family health history,
occupation, and hobbies are referred to as \u2714\u2714Representations<\/p>\n\n\n\n
PSI: LIFE, ACCIDENT, AND HEALTH
PRACTICE EXAM ALREADY PASSED
Under the misstatement of age or gender provision, what happens if it is determined at death that
the insured’s age or gender was misstated on a life insurance policy application? \u2714\u2714Benefits are
adjusted to an amount that the premium would have purchased at the correct age or gender.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as thereafter as is reasonably possible?
\u2714\u2714Notice of claim.
When will a policy pay on a UCR basis? \u2714\u2714When particular benefits are not listed on a
payment schedule.
All of the following are non-forfeiture options EXCEPT \u2714\u2714Cash dividend option.
What happens when the lifetime maximum benefit limit has been reached? \u2714\u2714The insured will
pay all of the remaining medial costs for as long as the policy is in force.<\/p>\n\n\n\n
Whose responsibility is it to make sure that the company is notified of a death claim at the
earliest possible opportunity (in most cases)? \u2714\u2714The producer.
What is the waiver of premium provision? \u2714\u2714In a long term care contract, the premium is
waived after the insured has been confined for a specific period of time.
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while? \u2714\u2714Committing a misdemeanor
Which is a disadvantage to a flexible premium annuity? \u2714\u2714The actual amount of the annuity
benefit cannot be determined in advance.
What does coninsurance mean? \u2714\u2714The insurer and the insured share expenses over the
deductible.
Under normal conditions which of the following is TRUE for proof of loss when a single loss is
claimed? \u2714\u2714The insured has 90 days from the date of loss to provide proof of loss.<\/p>\n\n\n\n
PSI Insurance Exam Questions and
Answers Rated A+
What is it called when a life insurance policy pays a multiple of the coverage amount when
certain types of accidents occur? \u2714\u2714multiple indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the
time granted by the insurer, what is the maximum amount of time for reinstatement of the
policy? \u2714\u271430 days
Which of the following statements regarding a pure life annuity payout option is correct?
\u2714\u2714This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision in health
insurance policies? \u2714\u2714fraudulent misstatements
If an individual is insured by both their own health insurance policy and their spouse’s policy,
which policy pays first in the event of an illness? \u2714\u2714The individual’s policy pays first, the
spouse’s policy pays the remaining up to coverage amount.<\/p>\n\n\n\n
When can the premiums of an individually owned health insurance policy be deducted from the
individual’s income tax? \u2714\u2714when the taxpayer’s unreimbursed medical expenses exceed 7.5% of
adjusted gross income during a taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered
during the policy’s initial \u2714\u27142 year period.
Which of the following is a characteristic of Health Maintenance Organizations (HMOs)?
\u2714\u2714preventive care
The life insurance policy will not be truly effective until all of the following occur EXCEPT
\u2714\u2714the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and insured at the time
of application? \u2714\u2714when a third-party applicant names themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy? \u2714\u2714The
cash value earnings are based on the performance of the separate account.<\/p>\n\n\n\n
The person who receives the benefit of an annuity is known as the \u2714\u2714annuitant.
Which of the following is an example of a premium payment mode? \u2714\u2714annual premium
payment
How do most disability policies handle the case of a recurrent disability occurring at least 90
days after the first claim? \u2714\u2714it must be handled as a new claim for a new period of disability,
requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? \u2714\u2714Routine care is
provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how
many months from the effective date of the policy? \u2714\u27146 months
What does an application for insurance contractually represent for the insured? \u2714\u2714an offer
Which of the following is exempted from the incontestability provision in insurance policies?
\u2714\u2714fraudulent misstatements<\/p>\n\n\n\n
Which of the following may be thought of as a time deductible rather than a dollar deductible in
a disability income policy because benefits are not payable during that time? \u2714\u2714elimination
period
How long after being entitled to Social Security disability benefits will an individual be eligible
to receive Medicare benefits? \u2714\u27142 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the
policy will be \u2714\u2714considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying
investment account? \u2714\u2714variable
What is a MIB report? \u2714\u2714medical information on an applicant for assessing life or health
insurance risk
Group Life Policies typically include which of the following provisions? \u2714\u2714conversion
privilege<\/p>\n\n\n\n
PSI – LIFE, ACCIDENT, AND HEALTH
QUESTIONS AND ANSWERS WITH
CERTIFIED SOLUTIONS
What happens under a misstatement of age clause on a disability policy?
1.
The policy would be terminated and all premiums would be returned to the policy owner.
2.
The policy would be terminated and all premiums would be retained by the insurance company.
3.
All amounts payable under this policy shall be what the premium originally would have
purchased and been paid at the correct age.
4.
Prior to any benefits being payable, the insured shall rate and pay the difference in premiums
based upon his correct age \u2714\u2714All amounts payable under this policy shall be what the premium
originally would have purchased and been paid at the correct age.
Whether admitted or nonadmitted, how does a “foreign” insurer differ from an “alien” or
“domestic” insurer?
1.<\/p>\n\n\n\n
A “foreign” insurer is organized under the laws of another country.
2.
A “foreign” insurer is prohibited from transacting insurance with the State of California.
3.
A “foreign” insurer is organized under the laws of another state within the United States.
4.
A “foreign” insurer transacts business in multiple languages not spoken in the United States.
\u2714\u2714A “foreign” insurer is organized under the laws of another state within the United States.
Which of the following is TRUE regarding nonadmitted insurers?
1.
A felony is committed by the agent in the state of a nonadmitted insurer.
2.
Acting as an agent for a nonadmitted insurer is considered a misdemeanor.
3.
The agent shall pay $1,000 in addition to any fees involving the commission of a felony.
4.
Specific penalties shall be determined by the Insurance Commissioner on a case by case basis.
\u2714\u2714Acting as an agent for a nonadmitted insurer is considered a misdemeanor.<\/p>\n\n\n\n
What happens if an owner requests an immediate investment of monies in a variable annuity
policy be returned during the 30 day cancellation period?
1.
The owner shall forfeit any money invested.
2.
The owner shall receive the market value at the time of the cancellation.
3.
The owner shall receive a refund of premium but nothing earned during cancellation period.
4.
The owner shall receive a full refund of premium, plus the market value, minus any commission
fees. \u2714\u2714The owner shall receive the market value at the time of the cancellation.
Can any life insurer issue group life insurance with premium rates less than the usual rates for
such insurance?
1.
Yes, when the Department of Insurance has requested they do so.
2.
Yes, if the insurer has filed an exemption form to do so.<\/p>\n\n\n\n
3.
Yes, they may do so on any group plan, with or without annuities.
4.
No, there are no circumstances when this is allowed. \u2714\u2714Yes, they may do so on any group plan,
with or without annuities
Which of the following is TRUE regarding the use of fictitious names for business?
1.
Fictitious names do not need to be reported like actual personal or business names.
2.
The actual and fictitious business names must be registered with the commissioner.
3.
The licensee may register 3 or more fictitious names in addition to their real name the first year.
4.
A licensee may continue to use for 10 days a fictitious name prohibited by the commissioner
until notification. \u2714\u2714The actual and fictitious business names must be registered with the
commissioner<\/p>\n\n\n\n
PSI life, accident, and health questions
and answers 100% pass
How long after being entitled to disability benefits will an individual be eligible to receive
Medicare benefits?
A. immediately
B. 1 year
C. 2 years
D. At age 65 \u2714\u27142 years
What is the return of premium rider?
A. an increasing amount of term insurance that always equals the total of premiums paid up to
the current point
B. a provision that allows the insured to cancel the policy in the first two years and have
premiums refunded
C. an increasing amount of term insurance that equals the cash value of the policy at any point in
time
D. a provision that states the insurer must return any premiums paid during the free-look period
\u2714\u2714an increasing amount of term insurance that always equals the total of premiums paid up to
the current point<\/p>\n\n\n\n
In a home healthcare benefit, all of the following are eligible expenses EXCEPT
A. intermittent part-time nursing care;
B. physical, occupational, or speech therapy;
C. blood transfusions
D. medical social services; \u2714\u2714blood transfusions
All of the following are classifications of risk EXCEPT
A. substandard
B. preferred
C. declined
D. non-nicotine \u2714\u2714non-nicotine
Which of the following is exempted from the incontestability provision in insurance policies?
A. fraudulent misstatements
B. pre-existing conditions
C. change in health
D. changes in the insurance code \u2714\u2714fraudulent misstatements<\/p>\n\n\n\n
A group conversion option may be used in all the following instances EXCEPT
A. the termination of the master policy.
B. loss of coverage due to loss of employment.
C. loss of eligibility on the part of a class of insureds.
D. a life-changing event, such as marriage, divorce, or childbirth. \u2714\u2714a life-changing event, such
as marriage, divorce, or childbirth.
Which of the following is characteristic of a non-qualified plan?
A. defined vesting schedule
B. plan established by the employer
C. plan does not meet federal guidelines for tax benefits
D. employer contributions are deductible business expenses \u2714\u2714plan does not meet federal
guidelines for tax benefits
What does it mean if a health policy is conditionally renewable?
A. Insurer may elect NOT to renew based on the health of the insured.
B. Insurer may elect NOT to renew for any reason only on the policy anniversary or premium
due date.<\/p>\n\n\n\n
PSI EXAM QUESTIONS AND ANSWERS
(2022\/2023) (VERIFIED SOLUTIONS)
During which period of a Disability Income Policy is coverage effective but during which no
benefits will be paid under the policy? \u2714\u2714Probationary period
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while \u2714\u2714commiting a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a
new one? \u2714\u2714insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? \u2714\u2714With the
noncancelable policy the insurer may increase premiums only based on the terms of the policy.
What does first dollar coverage mean? \u2714\u2714As soon as covered medical expenses are incurred,
the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against the insurer after
written proof of loss is provided? \u2714\u27143 years<\/p>\n\n\n\n
What is a MIB report? \u2714\u2714medical information on an applicant for assessing life or health
insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT \u2714\u2714the incomplete
application can be accepted with the missing information added later.
hy are insurance policies considered conditional contracts? \u2714\u2714Certain conditions need to be met
to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? \u2714\u2714when the applicant
for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of application,
regardless of the applicant’s insurability? \u2714\u2714binding receipt
What specific new procedures does the USA Patriot Act require of insurance companies?
\u2714\u2714Establish an anti-money laundering program<\/p>\n\n\n\n
PSI – NY Life, Accident and Health
Practice Exam 17-55 Already Passed
Which policy provision permits the policy owner to take a specified number of days to examine
the contract, and allows for cancellation and a full refund if the policy owner rejects the terms or
costs? \u2714\u2714Free Look
When will a policy pay on a UCR basis? \u2714\u2714When particular benefits are not listed on a
payment schedule
Which type of rider reimburses health and social service expenses incurred in a convalescent or
nursing home facility? \u2714\u2714long term care rider
Which of the following is exempted from the incontestability provision in insurance policies?
\u2714\u2714Fraudulent misstatements
What does first dollar coverage mean? \u2714\u2714As soon as covered medical expenses are incurred,
the policy begins to pay<\/p>\n\n\n\n
What is the waiver of premium provision? \u2714\u2714In a long term care contract, the premium is
waived after the insured has been confined for a specific period of time
According to the Time Payment of Claims provision, the insurer must make the payment
immediately after receiving proof of loss EXCEPT \u2714\u2714for claims involving periodic payments
Which is a disadvantage to a flexible premium annuity? \u2714\u2714the actual amount of the annuity
benefit cannot be determined in advance
When a policy or certificate containing an accelerated benefit provision is applied for or
delivered, the producer is responsible for providing that applicant a summary of coverage that
includes all of the following EXCEPT \u2714\u2714a detailed and comprehensive summary of the
accelerated benefit
which one of the following represents an advantage of obtaining a policy loan versus a
withdrawal? \u2714\u2714the loan is not taxed while a withdrawal is taxed for amounts above the contract
cost basis
How does a noncancelable policy differ from a guaranteed renewable policy? \u2714\u2714with the non
cancelable policy the insurer may increase premiums only based on the terms of the policy<\/p>\n\n\n\n
PSI Practice test questions and answers
100% Pass
When delivering a policy to the insured, an agent should carefully explain the?
a. sections that the insured is unclear about
b. riders or endorsements that have been added to the policy
c. entire policy summary, including any riders, exclusions, and costs
d. exclusions and preexisting conditions \u2714\u2714entire policy summary, including any riders,
exclusions, and costs
The policy and the application constitute the complete agreement between the policyowner and
the insurance company. This is known as the?
a. Right to Examine
b. Entire Contract Provision
c. Utmost Good Faith Agreement
d. Ownership Provision \u2714\u2714Entire Contract Provision
Which of the following types of Dental Policies typically pays a portion of usual and customary
charges for covered procedures?<\/p>\n\n\n\n
a. Integrated Deductible
b. Pre-Paid Dental
c. Scheduled
d. Comprehensive (non-scheduled) \u2714\u2714Comprehensive (non-scheduled)
Which of the following policies is considered a limited policy?
a. Basic Hospital
b. Accident Only
c. Major Medical
d. Basic Surgical \u2714\u2714Accident Only
A few small employers in the same industry join together to become eligible for group insurance.
The type of health insurance they have created for each other is known as?
a. Blanket Health
b. Franchise Health
c. Group Creditor-Debtor
d. Multiple Employer Trust (MET) \u2714\u2714Multiple Employer Trust (MET)<\/p>\n\n\n\n
A prospective insured wants to purchase a policy that will provide the HIGHEST amount of
protection for a temporary period during which the insured will have limited financial resources.
The agent should advise the prospective insured to purchase which of the following types of
policies?
a. Whole Life
b. Limited-Pay Life
c. Variable Life
d. Term Life \u2714\u2714Term Life
Under an individual policy, an insured who CAN’T perform the duties of his\/her own occupation
for a specific period of time is?
a. residually disabled
b. totally disabled
c. occupationally disabled
d. permanently disabled \u2714\u2714totally disabled
What is the tax advantage of a non-qualified annuity?
a. Premiums are tax deductible
b. Premiums are not tax deductible<\/p>\n\n\n\n
PSI CA Insurance Test Questions and
Answers Passed with 100%
What is the procedure regarding change of address for a licensee? \u2714\u2714The commissioner must be
notified immediately of any change in the personal, business, or email address.
What is the punishment for a person who refuses to deliver books, records, or assets to the
commissioner when subject to a seizure order in an insolvency proceeding? \u2714\u2714Not more than
$1000 fine and\/or 1 year imprisonment
An agent or representative who issues long term care insurance must NOT do the following
\u2714\u2714complete a total of 10 hours of continuing education if licensed before January 1st, 2002.
According to the Administrative Procedures Act, what is required to make changes to the
California Insurance Code? \u2714\u2714The Department of Insurance is required to publish proposed
changes at least 45 days prior to the hearing or decision to adopt the change.
A person who does NOT hold a valid license may NOT do the following \u2714\u2714examine contracts
of insurance.<\/p>\n\n\n\n
Which of the following is TRUE regarding nonadmitted insurers? \u2714\u2714Acting as an agent for a
nonadmitted insurer is considered a misdemeanor.
Which of the following is a party to a contract of insurance bound to communicate EXCEPT
\u2714\u2714those which the other would know by retaining a consultant with specialized knowledge in
insurance matters.
Which of the following is the method wherein a contract of insurance is finalized as relates to the
sales process? \u2714\u2714Execution of a contract of insurance
Who is eligible to be an insurer? \u2714\u2714Any person, company, organization, or corporation that is
capable of making a contract.
Whether admitted or nonadmitted, how does a “foreign” insurer differ from an “alien” or
“domestic” insurer? \u2714\u2714A “foreign” insurer is organized under the laws of another state within
the United States.
All of the following are examples of representation EXCEPT \u2714\u2714it may be altered after the
insurance is effected.<\/p>\n","protected":false},"excerpt":{"rendered":"
PSI Practice Exam – Life InsuranceQuestions and Answers Rated A+For an individual long-term care policy there is an annual dollar limit for tax deductions that isbased on which of thefollowing? Which part of an insurance contract contains the promise to pay losses covered by the policy inexchange for theinsured’s premium and compliance with policy terms? […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-116903","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/116903","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=116903"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/116903\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=116903"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=116903"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=116903"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}