PSI EXAM Questions with Complete Solutions 2024

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- committing a misdemeanour 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.