ACTUAL PSI TEST QUESTIONS EXAM QUESTIONS

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ACTUAL PSI TEST QUESTIONS EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -45 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: A producer's fiduciary duty requires that

premiums are maintained in a personal bank account until remittance to insurer premiums be deposited in an interest bearing account premiums are forwarded to the insurer on a timely basis premiums be commingled

Answer:

Premiums are forwarded on a timely basis

Question 2: 3

Answer:

Which of these would limit a company's liability to provide insurance coverage?Waiver Exclusion Rider Provision Question 3: An individual who removes the risk of losing money in the stock market by never purchasing stocks is said to be engaging in Risk reduction Risk Transference Risk avoidance Risk retention

Answer:

Risk avoidance

Question 4: Countersignature

Answer:

Which of the following would be a valid reason why a policy premium would be higher than the standard premium?The insurer is not a member of the MIB The agent quoted the wrong price The insured does not have the necessary financial reserves The insured does not meet established underwriting requirements

Question 5: Adverse Selection

Answer:

Which of the following is an example of the illegal act of defamation?Offering premium rebate gift, or a special advantage of any kind to consumers as an inducement to purchase a contract of insurance Making a statement that is false or maliciously critical of the financial condition of an insurer Replacing an insurance policy from one insurer to another based on misrepresentation Using threat or force to restrict fair trade in the transaction of insurance

Question 6: 90

Answer:

People with higher loss exposure have the tendency to purchase insurance more often than those at average risk. This is called Risk retention preexisting conditions law of large numbers adverse selection

Question 7: Mutual

Answer:

What is the automatic continuance of insurance coverage referred to as?Renewal Reinstatement resumption renovation

Question 8: Exclusion

Answer:

How do insurers predict the increase of individual risks?Law of large numbers U.S. Census

Average mortality incidents Experience of morbidity

Question 9: additional premiums

Answer:

Which contract element is insurable interest a component of?Competent parties offer and acceptance consideration legal purpose

Question 10: Individual Underwriting

Answer:

A type of insurer that is owned by its policyowners is called domestic mutual stock in house

Question 11: Unilateral

Answer:

Legal purpose is a term used in contract law meaning there must be offer and acceptance the contract must be aleatory there must be legal reasons for entering into the contract the contract must be a contract of adhesion

Question 12: Commissioner

Answer:

In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered voidable condition alaleatory Unilateral

Question 13: implied

Answer:

All of the following are characteristics of a Group Life Insurance Plan EXCEPT Group underwriting Master Contract Individual Underwriting Probationary period Question 14: Making a statement that is false or maliciously critical of the financial condition of an insurer

Answer:

Insurance represents the process of risk selection avoidance transference assumption Question 15: A type of group that has a constitution and has been organized for purposes other than obtaining insurance is called a(n) employer group employee group association or labor group multiple coalition

Answer:

association or labor group

Question 16: completing the application and collecting the initial premium

Answer:

All of the following are examples of pure risk EXCEPT Losing money at a casino Injured while playing football Falling at a casino and breaking a hip Jewelry stolen during a home robbery Question 17: A contract that requires certain conditions or acts by the insured individual

Answer:

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?discreet apparent