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PSI EXAM QUESTIONS WITH VERIFIED ANSWERS
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PSI EXAM QUESTIONS WITH VERIFIED ANSWERS
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PSI EXAM QUESTIONS WITH VERIFIEDANSWERS
During which period of a Disability Income Policy is coverage effective but during which
no benefits will be paid under the policy? - Answer-Probationary period
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while - Answer-commiting a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than
obtaining a new one? - Answer-insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? - Answer-
With the noncancelable policy the insurer may increase premiums only based on the
terms of the policy.
What does first dollar coverage mean? - Answer-As 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? - Answer-3 years
What is a MIB report? - Answer-medical information on an applicant for assessing life or
health insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT - Answer-the
incomplete application can be accepted with the missing information added later.
hy are insurance policies considered conditional contracts? - Answer-Certain conditions
need to be met to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? - Answer-when
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? - Answer-binding receipt
What specific new procedures does the USA Patriot Act require of insurance
companies? - Answer-Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? - Answer-he policy is
originated primarily or solely for the purpose of resale
How do warranties differ from representations? - Answer-a warranty is guaranteed to be
true, a representation is believed to be true to the best of one's knowledge.
, Obtaining consumer information reports under false pretenses is prosecutable by which
of the following? - Answer-Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI practices? -
Answer-NCOIL Act
Which of the following occurs immediately after the application is submitted and the
initial premium paid? - Answer-the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of the
following EXCEPT - Answer-medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax deductions
that is based on which of the following? - Answer-age
Under which situation must insurable interest exist between the applicant and insured at
the time of application? - Answer-When a third-party applicant names themselves
beneficiary.
In noncontributory plans, which percentage of eligible members must participate? -
Answer-100%
When can the premiums of an individually owned health insurance policy be deducted
from the individual's income tax? - Answer-hen the taxpayer's medical expenses exceed
7.5% of adjusted gross income during a taxable year
Short term disability insurance generally only covers injuries due to which of the
following? - Answer-Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT -
Answer-transferring the management of costs to the insureds.
Why is rehabilitation considered worthy of federal help under workers' compensation? -
Answer-it reduces insurance losses and helps regain the worker's dignity
What type of insurance should a company purchase if it wants to insure the life of its
CEO? - Answer-key person insurance
The group conversion option is allowed for all of the following EXCEPT - Answer-during
the annual benefits enrollment period
All of the following are tax qualified retirement plans EXCEPT - Answer-Section 529
plan
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