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PSI Insurance Exam questions with correct answer1.
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PSI Insurance Exam questions with correct answer1.
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PSI Insurance Exam questions with correct answersWhat must the policy summary in a life insurance policy include?1.
conditional receipt and the insurer?s home office address2. reserve
deposits.3. the name and address of the insurance agent or broker4.
definition of replacement. Correct Answer-the name and address of the
insurance agent or broker
Which of the following statements is CORRECT about Medicare
Supplement Insurance?1. An agent must provide an outline of coverage
to an insured at the time of policy delivery.2. If an applicant has an
existing Medicare Supplement Policy, the information does not have to
be mentioned on the new application.3. Replacement of a Medicare
Supplement Policy is prohibited unless approved by the Commissioner
of Insurance.4. Duplication of Medicare Supplement coverage is
prohibited. Correct Answer-Duplication of Medicare Supplement
coverage is prohibited.
Replacement refers to which of the following?1. replacing an existing
policy with a new one2. replacing a beneficiary3. replacing one insured
with another4. replacing the original policy with a copy Correct Answer-
replacing an existing policy with a new one
An insured MUST present evidence of insurability and pay all overdue
premiums with interest after a policy has lapsed in order to exercise
which policy provision?1. Conversion.2. Reinstatement.3. Ownership.4.
Guaranteed Renewability. Correct Answer-Reinstatement.
,When replacing existing life insurance, what must an agent do?1.
Collect the in-force policies and send them to the replacing company.2.
Specify what constitutes the replacement.3. Notify the producer whose
policy is being replaced.4. Inform the applicant that the new policy face
amount must be higher than the replaced policy. Correct Answer-Inform
the applicant that the new policy face amount must be higher than the
replaced policy.
In order for an insurer to increase the premium on a noncancelable
policy, which of the following MUST be true?1. The premium increase
must be in the contract at the time it is issued.2. The insured develops a
medical condition that increases risk.3. The insured reaches the age of
65.4. The premium increase must be in line with current inflation rates.
Correct Answer-The premium increase must be in the contract at the
time it is issued
An agent who offers to pay the first insurance premium as an
inducement for an applicant to purchase a policy may be found guilty
of1. rebating.2. twisting.3. controlled business.4. unfair discrimination.
Correct Answer-rebating
What is the purpose of Stranger-originated life insurance (STOLI)?1. the
policy is originated primarily or solely for the purpose of resale2. the
policy is written so as to avoid proof of insurable interest3. it is a method
of insuring a person who has been previously declined.4. it is a
fraudulent policy meant for financial gain of someone unknown to the
insured. Correct Answer-the policy is originated primarily or solely for
the purpose of resale
,What is the minimum grace period for monthly accident and health
insurance policies?1. 7 days2. 10 days3. 31 days4. 90 days Correct
Answer-31 days
An insurance agent is defined as an individual who transacts business on
behalf of1. a client.2. his/her agency.3. an insured.4. an insurance
company. Correct Answer-an insurance company
An employee is laid off and converts a group health plan to an individual
policy. In this situation, the new policy1. will include a probationary
period.2. will exclude preexisting conditions for 6 months.3. premium
rate will be higher than the group rate.4. requires evidence of
insurability. Correct Answer-premium rate will be higher than the group
rate
Which of the following is defined as the dollar amount beyond which
the insured no longer participates in the payment of medical expenses?1.
Deductible2. Stop Loss Limit3. Maximum Benefit4. Coinsurance
Correct Answer-Stop Loss Limit
All of the following are characteristics of variable whole life EXCEPT
1.
the premium is level2. there is no guaranteed cash value3. there is no
guaranteed minimum death benefit.4. the agent must be licensed in both
insurance and securities. Correct Answer-there is no guaranteed
minimum death benefit.
, A group conversion option may be used in all the following instances
EXCEPT1.
the termination of the master policy.2. loss of coverage due to loss of
employment.3. loss of eligibility on the part of a class of insureds.4. a
life-changing event, such as marriage, divorce, or childbirth. Correct
Answer-a life-changing event, such as marriage, divorce, or childbirth.
All of the following are characteristics of COBRA EXCEPT 1.
qualifying events.2. notification statements.3. continuation of
coverage.4. change in medical privacy procedures. Correct Answer-
change in medical privacy procedures.
Which of the following is TRUE of an equity-indexed annuity?1.
It is a variable annuity.2. It may decrease in value.3. It requires a
securities license to sell.4. It has a guaranteed minimum interest rate.
Correct Answer-It has a guaranteed minimum interest rate.
Which of the following lists the three common types of permanent
individual life insurance?1.
Variable Life, Whole Life, Universal Life2. Whole Life, Incidental Life,
Term Life3. Universal Life, AD&D,Term Life4. Group Life, Whole
Life, Variable Life Correct Answer-Variable Life, Whole Life,
Universal Life
Current assumption whole life policies are sensitive to which of the
following? 1.
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