PSI - NY Life, Accident and Health Practice
Exam 17-55
Which policy provision permits the policy owner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policy owner
rejects the terms or costs? - Free Look
When will a policy pay on a UCR basis? - When particular benefits are not listed on a
payment schedule
Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility? - long term care rider
Which of the following is exempted from the incontestability provision in insurance
policies? - Fraudulent misstatements
What does first dollar coverage mean? - As soon as covered medical expenses are incurred,
the policy begins to pay
What is the waiver of premium provision? - In a long term care contract, the premium is
waived after the insured has been confined for a specific period of time
According to the Time Payment of Claims provision, the insurer must make the payment
immediately after receiving proof of loss EXCEPT - for claims involving periodic payments
Which is a disadvantage to a flexible premium annuity? - the actual amount of the annuity
benefit cannot be determined in advance
When a policy or certificate containing an accelerated benefit provision is applied for or
delivered, the producer is responsible for providing that applicant a summary of coverage
that includes all of the following EXCEPT - a detailed and comprehensive summary of the
accelerated benefit
which one of the following represents an advantage of obtaining a policy loan versus a
withdrawal? - the loan is not taxed while a withdrawal is taxed for amounts above the
contract cost basis
How does a noncancelable policy differ from a guaranteed renewable policy? - with the non
cancelable policy the insurer may increase premiums only based on the terms of the policy
What does it mean if a health policy is conditionally renewable? - Insurer may elect NOT to
renew only under the conditions specified in the policy
,When the suicide clause is inserted in a life insurance contract, death by suicide is not
covered during the policy's initial: - 2 year period
What does coinsurance mean? - The insurer and the insured share expenses over the
deductible.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as soon thereafter as is reasonably
possible? - Notice of claim
The right to change the beneficiary or dispose of the policy or its benefits in any manner
one chooses is reserved to the policy owner UNLESS which of the following is true? - The
policy owner has named an irrevocable beneficiary
Which of the following refers to how often a premium is paid? - Mode
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while - Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by whom
are they determined? - At the time the policy is purchased by the owner of the policy
All of the following are ownership rights EXCEPT - Switching the policy from one insured to
another
All of the following are TRUE regarding incomplete applications EXCEPT - The incomplete
application can be accepted with the missing information added later
A consumer report used to determine eligibility for insurance may include all of the
following EXCEPT - Medical underwriting exam
All of the following are required signatures on a life insurance application EXCEPT - The
minor in a juvenile policy
Why are insurance policies considered conditional contracts? - Certain conditions need to
be met to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? - when the applicant
for the policy is not the insured
Which of the following occurs immediately after the application is submitted and the initial
premium paid? - the underwriting process begins
Obtaining consumer information reports under false pretenses is prosecutable by which of
the following? - Fair Credit Reporting Act
,What is the purpose of Stranger-originated life insurance (STOLI)? - the policy is originated
primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT - non-nicotine
What specific new procedures does the USA Patriot Act require of insurance companies? -
Establish an anti-money laundering program
What procedure is used by an insurer to protect itself in the event a dispute arises and the
applicant and the agent do not recall the changes that were made in a completed
application? - The applicant and possibly the agent initial any changes made.
What is a MIB report? - medical information on an applicant for assessing life or health
insurance risk
How do warranties differ from representations? - a warranty is guaranteed to be true, a
representation is believed to be true to the best of one's knowledge.
If the insurer wishes to share an applicant's HIV status, the applicant must be given full
notice of all of the following EXCEPT - the treatment procedures that are covered by the
policy.
Which of the following was specifically designed to address STOLI and IOLI practices? -
NCOIL Act
Why is rehabilitation considered worthy of federal help under workers' compensation? - it
reduces insurance losses and helps regain the worker's dignity
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? - The individual's policy pays
first, the spouse's policy pays the remaining up to coverage amount.
The group conversion option is allowed for all of the following EXCEPT - during the annual
benefits enrollment period.
What type of insurance should a company purchase if it wants to insure the life of its CEO? -
key person insurance
All of the following are tax qualified retirement plans EXCEPT - Section 529 plan.
Why is relying solely on employer group life insurance generally considered inadequate for
most individual's needs? - It is financially insufficient to cover end of life expenses.
For an individual long-term care policy there is an annual dollar limit for tax deductions
that is based on which of the following? - age
, When can the premiums of an individually owned health insurance policy be deducted
from the individual's income tax? - when the taxpayer's medical expenses exceed 7.5% of
adjusted gross income during a taxable year
In noncontributory plans, which percentage of eligible members must participate? - 100%
Short term disability insurance generally only covers injuries due to which of the
following? - Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT - transferring
the management of costs to the insureds.
Under which situation must insurable interest exist between the applicant and insured at
the time of application? - When a third-party applicant names themselves beneficiary
Which of the following is characteristic of a nonqualified plan? - plan does not meet federal
guidelines for tax benefits
In a home healthcare benefit, all of the following are eligible expenses EXCEPT - blood
transfusions
All of the following are requirements to qualify for Social Security disability benefits
EXCEPT when - unable to work in occupation in which the worker was trained or educated
How long after being entitled to disability benefits will an individual be eligible to receive
Medicare benefits? - 2 years
Which of the following amends the Social Security Act to make Medicare secondary to
group health plans? - TEFRA
Which of the following is TRUE of a point of service plan? - A patient's care is coordinated
by an in-network primary care physician.
A group conversion option may be used in all the following instances EXCEPT - a life-
changing event, such as marriage, divorce, or childbirth
Which problem was universal life insurance designed to address? - low interest rates
during periods of high inflation
Compared to basic hospital, medical and surgical policies, which type of insurance provides
broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? -
major medical insurance
Current assumption whole life policies are sensitive to which of the following? - interest
rates
Exam 17-55
Which policy provision permits the policy owner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policy owner
rejects the terms or costs? - Free Look
When will a policy pay on a UCR basis? - When particular benefits are not listed on a
payment schedule
Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility? - long term care rider
Which of the following is exempted from the incontestability provision in insurance
policies? - Fraudulent misstatements
What does first dollar coverage mean? - As soon as covered medical expenses are incurred,
the policy begins to pay
What is the waiver of premium provision? - In a long term care contract, the premium is
waived after the insured has been confined for a specific period of time
According to the Time Payment of Claims provision, the insurer must make the payment
immediately after receiving proof of loss EXCEPT - for claims involving periodic payments
Which is a disadvantage to a flexible premium annuity? - the actual amount of the annuity
benefit cannot be determined in advance
When a policy or certificate containing an accelerated benefit provision is applied for or
delivered, the producer is responsible for providing that applicant a summary of coverage
that includes all of the following EXCEPT - a detailed and comprehensive summary of the
accelerated benefit
which one of the following represents an advantage of obtaining a policy loan versus a
withdrawal? - the loan is not taxed while a withdrawal is taxed for amounts above the
contract cost basis
How does a noncancelable policy differ from a guaranteed renewable policy? - with the non
cancelable policy the insurer may increase premiums only based on the terms of the policy
What does it mean if a health policy is conditionally renewable? - Insurer may elect NOT to
renew only under the conditions specified in the policy
,When the suicide clause is inserted in a life insurance contract, death by suicide is not
covered during the policy's initial: - 2 year period
What does coinsurance mean? - The insurer and the insured share expenses over the
deductible.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as soon thereafter as is reasonably
possible? - Notice of claim
The right to change the beneficiary or dispose of the policy or its benefits in any manner
one chooses is reserved to the policy owner UNLESS which of the following is true? - The
policy owner has named an irrevocable beneficiary
Which of the following refers to how often a premium is paid? - Mode
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while - Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by whom
are they determined? - At the time the policy is purchased by the owner of the policy
All of the following are ownership rights EXCEPT - Switching the policy from one insured to
another
All of the following are TRUE regarding incomplete applications EXCEPT - The incomplete
application can be accepted with the missing information added later
A consumer report used to determine eligibility for insurance may include all of the
following EXCEPT - Medical underwriting exam
All of the following are required signatures on a life insurance application EXCEPT - The
minor in a juvenile policy
Why are insurance policies considered conditional contracts? - Certain conditions need to
be met to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? - when the applicant
for the policy is not the insured
Which of the following occurs immediately after the application is submitted and the initial
premium paid? - the underwriting process begins
Obtaining consumer information reports under false pretenses is prosecutable by which of
the following? - Fair Credit Reporting Act
,What is the purpose of Stranger-originated life insurance (STOLI)? - the policy is originated
primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT - non-nicotine
What specific new procedures does the USA Patriot Act require of insurance companies? -
Establish an anti-money laundering program
What procedure is used by an insurer to protect itself in the event a dispute arises and the
applicant and the agent do not recall the changes that were made in a completed
application? - The applicant and possibly the agent initial any changes made.
What is a MIB report? - medical information on an applicant for assessing life or health
insurance risk
How do warranties differ from representations? - a warranty is guaranteed to be true, a
representation is believed to be true to the best of one's knowledge.
If the insurer wishes to share an applicant's HIV status, the applicant must be given full
notice of all of the following EXCEPT - the treatment procedures that are covered by the
policy.
Which of the following was specifically designed to address STOLI and IOLI practices? -
NCOIL Act
Why is rehabilitation considered worthy of federal help under workers' compensation? - it
reduces insurance losses and helps regain the worker's dignity
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? - The individual's policy pays
first, the spouse's policy pays the remaining up to coverage amount.
The group conversion option is allowed for all of the following EXCEPT - during the annual
benefits enrollment period.
What type of insurance should a company purchase if it wants to insure the life of its CEO? -
key person insurance
All of the following are tax qualified retirement plans EXCEPT - Section 529 plan.
Why is relying solely on employer group life insurance generally considered inadequate for
most individual's needs? - It is financially insufficient to cover end of life expenses.
For an individual long-term care policy there is an annual dollar limit for tax deductions
that is based on which of the following? - age
, When can the premiums of an individually owned health insurance policy be deducted
from the individual's income tax? - when the taxpayer's medical expenses exceed 7.5% of
adjusted gross income during a taxable year
In noncontributory plans, which percentage of eligible members must participate? - 100%
Short term disability insurance generally only covers injuries due to which of the
following? - Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT - transferring
the management of costs to the insureds.
Under which situation must insurable interest exist between the applicant and insured at
the time of application? - When a third-party applicant names themselves beneficiary
Which of the following is characteristic of a nonqualified plan? - plan does not meet federal
guidelines for tax benefits
In a home healthcare benefit, all of the following are eligible expenses EXCEPT - blood
transfusions
All of the following are requirements to qualify for Social Security disability benefits
EXCEPT when - unable to work in occupation in which the worker was trained or educated
How long after being entitled to disability benefits will an individual be eligible to receive
Medicare benefits? - 2 years
Which of the following amends the Social Security Act to make Medicare secondary to
group health plans? - TEFRA
Which of the following is TRUE of a point of service plan? - A patient's care is coordinated
by an in-network primary care physician.
A group conversion option may be used in all the following instances EXCEPT - a life-
changing event, such as marriage, divorce, or childbirth
Which problem was universal life insurance designed to address? - low interest rates
during periods of high inflation
Compared to basic hospital, medical and surgical policies, which type of insurance provides
broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? -
major medical insurance
Current assumption whole life policies are sensitive to which of the following? - interest
rates
