PSI Practice test questions and answers 100% Pass

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 entire 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 Entire Contract Provision Which of the following types of Dental Policies typically pays a portion of usual and customary charges for covered procedures? a. Integrated Deductible b. Pre-Paid Dental c. Scheduled d. Comprehensive (non-scheduled) Comprehensive (non-scheduled) Which of the following policies is considered a limited policy? a. Basic Hospital b. Accident Only c. Major Medical d. Basic Surgical Accident 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) Multiple Employer Trust (MET) 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 Term 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 totally disabled What is the tax advantage of a non-qualified annuity? a. Premiums are tax deductible b. Premiums are not tax deductible c. Growth is tax free d. Growth is tax deferred Growth is tax deferred HSAs cover current and future qualified healthcare costs. Account beneficiaries can make tax-free withdrawals to cover all of the following EXCEPT? a. prescription and nonprescription medicines b. retiree health insurance premiums c. Medigap expenses d. doctor's fees Medigap expenses A fraternal benefit society is one that? a. has underwriting guidelines that differ from ordinary insurance companies b. has been formed for the sole purpose of obtaining insurance c. provides life insurance benefits to its members d. distributes the cost of premiums equally among its members provides life insurance benefits to its members A misstatement of age on a Whole Life Insurance application will result in? a. cancellation of the policy b. non-renewal of the policy on the policy's anniversary date c. rescinding of the contract due to fraud d. change in benefits to reflect premium purchase for the correct age change in benefits to reflect premium purchase for the correct age At what age MUST an owner of a Traditional IRA start taking distributions? a. 59 1/2 b. 62 c. 65 d. 70 1/2 70 1/2 A Life Insurance Policy may be returned for cancellation and full refund if it is returned NO later than? a. 10 days after issue b. 10 days after receipt by the policyowner c. 30 days after issue d. 30 days after receipt by the policyowner 10 days after receipt by the policyowner In a Whole Life Policy, all of the following factors are guaranteed EXCEPT? a. cash values b. premiums c. dividends d. face amount dividends A company decides to purchase Key Employee Life Insurance for its vice president of operations. All of the following statements are correct EXCEPT the? a. company is the policyowner b. company is the applicant c. employee names the beneficiary d. employee gives consent to be insured employee names the beneficiary When replacing existing life insurance, an agent MUST? a. collect the in-force policies and send them to the replacing company b. obtain a completed definition of replacement c. notify the producer whose policy is being replaced d. inform the applicant that the new policy face amount must be higher than the replaced policy obtain a completed definition of replacement A Business Disability Buy-Sell Policy is designed to assist in the sale of a business for the? a. death of a key employee b. retirement of a business owner c. disability of a business owner d. disability of a key employee disability of a business owner Business partners wanting an insurance policy on the life of the other partners would purchase? a. Split-Dollar Insurance b. Key-Employee Life Insurance c. a Cross-Purchase Plan d. an Entity Plan a Cross-Purchase Plan Group Life Policies typically include which of the following provisions? a. Future Income Option b. Automatic Premium Loan c. Conversion Privilege d. 60 Day Free Look Conversion Privilege A Basic Hospital Policy pays expenses for? a. surgical services b. hospital room and board c. in-hospital physician visits d. post-operative care hospital room and board Which of the following is a qualified plan? a. Deferred Compensation b. Split-Dollar c. 401 k d. Individual Annuity 401 k An insurance policy's gross premium is calculated in which of the following ways? a. Risk + expenses - interest b. Risk - expenses + interest c. Mortality + expenses + interest d. Morbidity + expenses - interest Risk + expenses - interest Which of the following is CORRECT about Medicaid? a. a public program assisting individuals with low income to pay for their medical care b. It provides benefits to those with chronic kidney disease c. It provides Accident and Health insurance for those aged 65 and older d. It provides an income to the unemployed a public program assisting individuals with low income to pay for their medical care An employee is laid off and converts a group health plan to an individual policy. In this situation, the new policy? a. will include a probationary period b. will exclude preexisting conditions for 6 months c. premium rate will be higher than the group rate d. requires evidence of insurability premium rate will be higher than the group rate Which of the following statements is CORRECT about the Coordination of Benefits Provision? a. prohibits an insurer from selling a health policy to an applicant who already has similar coverage b. prevents an insured covered by two health plans from making a profit on a covered loss c. allows an insured to change insurers without losing benefits d. permits an insurer to defer paying a claim for a work-related injury until Workers' Compensation Benefits have expired prevents an insured covered by two health plans from making a profit on a covered loss A Health Insurance Policy that covers dependent children MUST provide coverage for newborns beginning? a. at the moment of birth b. 14 days after birth c. 31 days after birth d. on the date the insurance company is notified at the moment of birth Under the Free Look Provision, an insured may cancel a policy and receive a full refund within 10 days of the date that the? a. agent took the application b. insurance company approved the application c. insurance company issued the policy d. agent delivered the policy agent delivered the policy Which of the following features makes Universal Life Insurance different from other forms of Whole Life Insurance? a. Premium schedules b. Free look period c. Settlement options d. Beneficiary provisions Premium schedules Which of the following policies provides a specified income benefit if an insured person becomes incapable of working? a. Emergency Income b. Supplemental Income c. Temporary Income d. Disability Income Disability Income A temporary license may be issued by the Insurance Superintendent to which of the following individuals? a. A licensed agent who moved from Connecticut to NY b. An agent whose license lapsed but is requesting reinstatement c. An applicant with a power of attorney d. The surviving spouse of a deceased agent The surviving spouse of a deceased agent An insured purchases an individual Major Medical Policy with an effective date of November 1. On November 14, the insured's doctor told her that she was 3 months pregnant. The medical charges for the pregnancy may NOT be covered because of the? a. Incontestable Clause b. Preexisting Conditions Provision c. Grace Period Provision d. Time of Payment of Claims Provision Preexisting Conditions Provision The insurance contract in which ONLY one party, the insurer, makes a promise to another is known as? a. adhesion b. unilateral c. personal d. aleatory unilateral Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how many months from the effective date of the policy? a. 3 months b. 6 months c. 12 months d. 18 months 6 months If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the policy will be? a. subject to a 20% surrender charge b. tax deferred until retirement c. principal so there is no tax liability d. considered taxable income first considered taxable income first The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is known as? a. limitation b. exclusion c. exception d. reduction exclusion The policy that is designed to provide nursing home benefits on an extended basis for NOT less than 12 consecutive months is? a. Long Term Care b. Nursing Home c. Medicare Supplement d. Basic Medical Long Term Care An annuitant paid $500,000 for an annuity on September 1 and expects to receive lifetime benefit payments beginning October 1. What type of annuity was purchased? a. Single Premium Immediate b. Single Premium Deferred c. Flexible Premium Immediate d. Flexible Premium Deferred Single Premium Immediate An agent who makes false statements about the financial condition of another insurance company may be found guilty of? a. fraud b. unfair discrimination c. defamation d. twisting defamation Offer, acceptance, and consideration are necessary elements of? a. a warranty b. a representation c. a contract d. insurable interest a contract An insurance agent is defined as an individual who transacts business on behalf of? a. a client b. his/her agency c. an insured d. an insurance company an insurance company When may a policyowner change a revocable beneficiary? a. only when the insurance company renews the policy b. only if the beneficiary dies c. never d. at any time at any time HMO differs from a traditional insurer in that HMO? a. emphasizes preventive medicine b. offers higher benefit limits c. doesn't restrict an insured's choice of hospital or physicians d. privately financed emphasizes preventive medicine If an insurance company obtains an Investigative Consumer Report on a prospective insured, it must inform the prospect that its permitted to do so under which Federal law? a. Federal Investigation Reporting Act (FIRA) b. Insurance Credit Investigation Act (ICIA) c. Fair Credit Reporting Act (FCRA) d. Investigation Information Practices Act (IIPA) Fair Credit Reporting Act (FCRA) All of the following are exclusions from Accident & Health policies, EXCEPT? a. loss of income from disability b. act of war c. insured's self inflected injuries d. participation in a felony loss of income from disability The aspect of a policy that allows a policyholder to select the timing of premium payments is known as? a. consideration b. reasonable expectations c. acceptance d. premium mode premium mode Standard nonforfeiture benefits include? a. return of premium b. 10 day free look period c. reduced paid up insurance d. deferred payment of cash surrender value for 9 months reduced paid up insurance Policy summary in a Life Insurance Policy must include? a. conditional receipt b. reserve deposits c. insurance company home office address d. definition of replacement insurance company home office address LTD policy covers what? a. hospital indemnity b. convalescence c. respite care d. prescription drugs respite care