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PSI INSURANCE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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PSI INSURANCE EXAM QUESTIONS WITH 100% CORRECT ANSWERS
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PSI INSURANCE EXAM QUESTIONSWITH 100% CORRECT ANSWERS
What is it called when a life insurance policy pays a multiple of the coverage amount
when certain types of accidents occur? - Answer-multiple 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? - Answer-30 days
Which of the following statements regarding a pure life annuity payout option is correct?
- Answer-This 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? - Answer-fraudulent 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? - Answer-The individual's policy
pays first, the spouse's policy pays the remaining up to coverage amount.
When can the premiums of an individually owned health insurance policy be deducted
from the individual's income tax? - Answer-when 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 - Answer-2 year period.
Which of the following is a characteristic of Health Maintenance Organizations (HMOs)?
- Answer-preventive care
The life insurance policy will not be truly effective until all of the following occur EXCEPT
- Answer-the 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? - Answer-when a third-party applicant names themselves
beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy? -
Answer-The cash value earnings are based on the performance of the separate
account.
The person who receives the benefit of an annuity is known as the - Answer-annuitant.
,Which of the following is an example of a premium payment mode? - Answer-annual
premium payment
How do most disability policies handle the case of a recurrent disability occurring at
least 90 days after the first claim? - Answer-it 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? - Answer-Routine
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? - Answer-6 months
What does an application for insurance contractually represent for the insured? -
Answer-an offer
Which of the following is exempted from the incontestability provision in insurance
policies? - Answer-fraudulent misstatements
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? - Answer-elimination period
How long after being entitled to Social Security disability benefits will an individual be
eligible to receive Medicare benefits? - Answer-2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received
under the policy will be - Answer-considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an
underlying investment account? - Answer-variable
What is a MIB report? - Answer-medical information on an applicant for assessing life or
health insurance risk
Group Life Policies typically include which of the following provisions? - Answer-
conversion privilege
In a case where an individual's health is insured by both their own policy and their
spouse's policy, which policy pays in the event of an illness? - Answer-The individual's
policy pays first, the spouse's policy pays the remaining up to coverage amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks
is known as - Answer-exclusion.
, The primary purpose of Health Reimbursement Accounts (HRAs) is to assist - Answer-
covered employees with the payment of medical expenses on a high deductible plan
funded through pre-tax contributions.
What type of insurance should a company purchase if it wants to insure the life of its
CEO? - Answer-key person insurance
Which is the major reason why long term care insurance is becoming increasingly
important? - Answer-As life expectancy increases, the chances of needing long term
care also increase.
Which of the following requires the claim information to be submitted to the insurer prior
to treatment to determine whether the treatment is covered and how much the insured's
plan will pay? - Answer-precertification provision
Which policy provision permits the policyowner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policyowner
rejects the terms or costs? - Answer-free look
A life insurance policy may be returned for cancellation and full refund if it is returned
NO later than - Answer-20 days after receipt by the policyholder.
Which of the following features makes Universal Life Insurance different from other
forms of Whole Life Insurance? - Answer-premium schedules
Which of the following is TRUE in a key employee life insurance policy? - Answer-The
corporation is the applicant and policy holder. The employee is the insured.
How are issues of ambiguity usually resolved because insurance contracts are
contracts of adhesion? - Answer-in favor of the insured because the insurance company
drafts the language in the contract
Which of the following is a characteristic of indexed universal life insurance? - Answer-A
portion of the cash value is tied to an equity index account linked to a stipulated stock
index.
Managed care plans increase efficiency by all of the following means EXCEPT -
Answer-transferring the management of costs to the insureds.
Which type of policy allows the policyowner the option to change the face value, amount
of premium, length of coverage, and type of coverage without changing policies? -
Answer-adjustable life
Which of the following policy loans is a provision in which an amount equal to the
premium due is subtracted from the cash value to pay the premium and prevent a lapse
of the policy? - Answer-automatic premium loan
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