PSI LIFE, ACCIDENT AND HEALTH TEST BANK EXAM
2026: 300+ QUESTIONS AND 100% VERIFIED ANSWERS |
GRADED A+ | GUARANTEED PASS!!
__________ life insurance policies are usually less expensive than ____________
policies.
- answer-Because the risk is spread out among a larger number of people, the
premiums for group life insurance are typically cheaper than the premiums for
individual coverage (for a comparable amount of death benefit).
____________ is the number one reason why people buy life insurance.
- answer-The primary reason that people purchase life insurance is for income
replacement. This is because those who are left behind will need funds to continue
paying ongoing expenses, without having to bear undue financial hardship.
____________ life insurance policies are considered to be interest rate sensitive
because the policy's cash value is used to purchase short-term interest bearing
instruments.
- answer-With a universal life insurance policy, the cash value in the plan is used
for purchasing short - term interest bearing investments. However, with this type of
policy, there is also a minimum guaranteed interest rate in the cash value portion.
. __________ plans combine the features of an HMO and PPO.
- answer-POS, or point-of-service, plans are a type of managed care option that
combines features from HMOs and PPOs. With a POS plan, participants are
required to designate an in-network physician to be their primary health care
provider. The participant may go out-of-network if they choose, however, if they
do so, they will have to pay most of the cost out-of-pocket - unless the PCP refers
them to that specific provider.
. Robert is considering purchasing life insurance as part of his retirement planning.
He is questioning how he will take care of himself and his wife if they become ill
or need long-term care services. How will they afford it if a catastrophic event
occurs? As Robert's agent, what rider should you discuss with him?
- answer-Accelerated death benefit rider
- With this rider, the insured may collect some or all of the face amount of their life
insurance policy provided that they meet the illness or long-term care
qualifications. The death benefit on the life insurance policy will subsequently be
reduced by the amount that insured withdraws.
,.Death benefit claims from life insurance policies are not subject to income
taxation.
- answer-True
- Life insurance policy death benefits are not subject to income taxation to the
beneficiary. This is because the IRS deems that income taxation could cause undue
financial hardship to the beneficiary. It is important to note that such proceeds may
be subject to estate taxes.
.In most cases, death benefit claims that are the result of an insured's suicide that
arise within ____________ of policy purchase are not normally paid.
- answer-2 years
-Most insurers will not pay out life insurance claims due to an insured's suicide
within two years of policy purchase. This helps in preventing individuals from
purchasing coverage for loved ones and then immediately committing suicide to
allow payment of funds to their loved ones.
A __________ is a type of managed care plan that essentially combines the
characteristics of both an HMO and a PPO.
- answer-A POS, or point of service, plan offers more flexibility than an HMO but
less flexibility than one will have with a PPO. Participants have a primary care
physician, yet there is a broad base of medical providers in the network that
typically covers a wide geographic area
A __________ whole life insurance policy will share in the insurance company's
excess profits in the form of dividends.
- answer-Participating whole life insurance policies will share in the issuing
insurance company's excess profits in the form of dividends. These dividend
payments will typically go into the policy's cash value component, adding to the
amount of funds in this account.
A 1035 exchange applies to:
- answer-Annuities and Life Insurance
A 1035 exchange applies to annuities, life insurance and other long-term care
products, and provides that the exchange of an annuity for another annuity will not
result in a taxable gain. Outdated and underperforming products can be exchanged
for new ones with better features
,A 35-year old client wants to put a retirement plan in place. It is not necessary to
consider life insurance needs when creating a retirement plan
- answer-FALSE
Life insurance should be considered as an essential part of all financial plans. One
reason for this is that it can provide liquidity for survivors should the income of the
insured suddenly disappear. Proceeds from a life insurance policy can also go
toward funding specific financial goals such as a child's future college education.
A basic term life insurance policy provides a death benefit if the insured dies with
a specified period of time (10, 15, 20, 30 years). If the client survives the term, no
benefit is paid, and no premiums are returned. What insurance rider allows for
premiums to be paid back to the insured at the end of a specified period of time?
- answer-As the name indicates, premiums are returned to the insured at the end of
the specified term of the contract. Another benefit is if the insured dies, the
beneficiary receives both the death benefit and paid-in premiums.
A basic vision care package includes all of the following EXCEPT?
- answer-Safety glasses
A beneficiary on a life insurance policy will receive what value upon the death of
the insured?
- answer-Death benefit
- The death benefit is the amount that is paid to the policy beneficiary upon the
death of the insured. Should a permanent life insurance policy holder decide to
cancel the policy prior to the insured's death, they will receive the amount of the
cash surrender value.
A business client is looking for ways to decrease its monthly premiums. To get
down to the premium level sought after by the company, the agent realizes they
have to go to a high deductible health plan. As part of your advice to the business,
what should you include in your discussion?
- answer-Health savings accounts (HAS) are used with high deductible health
insurance policies. With an HSA, money that is saved on the premium may be put
into the account and then funds are used for certain medical fees. Because the
funds in the HSA account can be used for medical services, participants often use
them for un-covered procedures such as chiropractic visits or other health related
services that are not covered by their insurance policy.
A business client is seeking a group plan. It is important for the client that the
coverage allow use of in-network specialists without referrals and access to out-of-
, network providers if necessary. What type of product is likely best for this client?
- answer-Unlike an HMO, participants in a PPO can use out-of-network providers -
although it may cost more for the participant to do so. In addition, because there is
no need for a referral from one's primary care physician in order to see a specialist,
participants have more flexibility with a PPO.
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT?
- answer-Medical Underwriting exam.
A grace period allows the premium payor a period of time to pay overdue
premiums. How long is a grace period typically?
- answer-30 days
- A grace period is typically 30 days. The premium payor can meet outstanding
dues within 30 days to keep the policy in force without requiring any proof of
insurability.
A group conversion option may be used in all the following instances EXCEPT?
- answer-A life-changing event, such as marriage, divorce, or childbirth.
A life insurance policy beneficiary must take receipt of the proceeds within 2 years
of the insured's death.
- answer-False
A beneficiary is not required to take receipt of proceeds within a specific amount
of time, and they may even leave the funds on deposit at the insurance company
A new start-up internet company, Ecompany, applied for a business loan. The bank
was concerned with the company's lack of assets and asked that its executives take
out life insurance policies with the bank as a beneficiary. The bank's request
violated the Federal Insurance Office Act of 2010 under Dodd-Frank.
- answer-False
Lenders often require business borrowers to purchase life insurance as a way of
ensuring that the loaned funds will be paid off.
A person in excellent health may be placed into the ____________ category on his
or her life insurance policy.
- answer-Those who are considered to be in excellent health present less of a risk
to the insurance company in terms of the likelihood of having to pay claims.
Because of this, these insureds are typically placed in the preferred risk category.
In many cases, these insureds may even receive a discount on their premium.
2026: 300+ QUESTIONS AND 100% VERIFIED ANSWERS |
GRADED A+ | GUARANTEED PASS!!
__________ life insurance policies are usually less expensive than ____________
policies.
- answer-Because the risk is spread out among a larger number of people, the
premiums for group life insurance are typically cheaper than the premiums for
individual coverage (for a comparable amount of death benefit).
____________ is the number one reason why people buy life insurance.
- answer-The primary reason that people purchase life insurance is for income
replacement. This is because those who are left behind will need funds to continue
paying ongoing expenses, without having to bear undue financial hardship.
____________ life insurance policies are considered to be interest rate sensitive
because the policy's cash value is used to purchase short-term interest bearing
instruments.
- answer-With a universal life insurance policy, the cash value in the plan is used
for purchasing short - term interest bearing investments. However, with this type of
policy, there is also a minimum guaranteed interest rate in the cash value portion.
. __________ plans combine the features of an HMO and PPO.
- answer-POS, or point-of-service, plans are a type of managed care option that
combines features from HMOs and PPOs. With a POS plan, participants are
required to designate an in-network physician to be their primary health care
provider. The participant may go out-of-network if they choose, however, if they
do so, they will have to pay most of the cost out-of-pocket - unless the PCP refers
them to that specific provider.
. Robert is considering purchasing life insurance as part of his retirement planning.
He is questioning how he will take care of himself and his wife if they become ill
or need long-term care services. How will they afford it if a catastrophic event
occurs? As Robert's agent, what rider should you discuss with him?
- answer-Accelerated death benefit rider
- With this rider, the insured may collect some or all of the face amount of their life
insurance policy provided that they meet the illness or long-term care
qualifications. The death benefit on the life insurance policy will subsequently be
reduced by the amount that insured withdraws.
,.Death benefit claims from life insurance policies are not subject to income
taxation.
- answer-True
- Life insurance policy death benefits are not subject to income taxation to the
beneficiary. This is because the IRS deems that income taxation could cause undue
financial hardship to the beneficiary. It is important to note that such proceeds may
be subject to estate taxes.
.In most cases, death benefit claims that are the result of an insured's suicide that
arise within ____________ of policy purchase are not normally paid.
- answer-2 years
-Most insurers will not pay out life insurance claims due to an insured's suicide
within two years of policy purchase. This helps in preventing individuals from
purchasing coverage for loved ones and then immediately committing suicide to
allow payment of funds to their loved ones.
A __________ is a type of managed care plan that essentially combines the
characteristics of both an HMO and a PPO.
- answer-A POS, or point of service, plan offers more flexibility than an HMO but
less flexibility than one will have with a PPO. Participants have a primary care
physician, yet there is a broad base of medical providers in the network that
typically covers a wide geographic area
A __________ whole life insurance policy will share in the insurance company's
excess profits in the form of dividends.
- answer-Participating whole life insurance policies will share in the issuing
insurance company's excess profits in the form of dividends. These dividend
payments will typically go into the policy's cash value component, adding to the
amount of funds in this account.
A 1035 exchange applies to:
- answer-Annuities and Life Insurance
A 1035 exchange applies to annuities, life insurance and other long-term care
products, and provides that the exchange of an annuity for another annuity will not
result in a taxable gain. Outdated and underperforming products can be exchanged
for new ones with better features
,A 35-year old client wants to put a retirement plan in place. It is not necessary to
consider life insurance needs when creating a retirement plan
- answer-FALSE
Life insurance should be considered as an essential part of all financial plans. One
reason for this is that it can provide liquidity for survivors should the income of the
insured suddenly disappear. Proceeds from a life insurance policy can also go
toward funding specific financial goals such as a child's future college education.
A basic term life insurance policy provides a death benefit if the insured dies with
a specified period of time (10, 15, 20, 30 years). If the client survives the term, no
benefit is paid, and no premiums are returned. What insurance rider allows for
premiums to be paid back to the insured at the end of a specified period of time?
- answer-As the name indicates, premiums are returned to the insured at the end of
the specified term of the contract. Another benefit is if the insured dies, the
beneficiary receives both the death benefit and paid-in premiums.
A basic vision care package includes all of the following EXCEPT?
- answer-Safety glasses
A beneficiary on a life insurance policy will receive what value upon the death of
the insured?
- answer-Death benefit
- The death benefit is the amount that is paid to the policy beneficiary upon the
death of the insured. Should a permanent life insurance policy holder decide to
cancel the policy prior to the insured's death, they will receive the amount of the
cash surrender value.
A business client is looking for ways to decrease its monthly premiums. To get
down to the premium level sought after by the company, the agent realizes they
have to go to a high deductible health plan. As part of your advice to the business,
what should you include in your discussion?
- answer-Health savings accounts (HAS) are used with high deductible health
insurance policies. With an HSA, money that is saved on the premium may be put
into the account and then funds are used for certain medical fees. Because the
funds in the HSA account can be used for medical services, participants often use
them for un-covered procedures such as chiropractic visits or other health related
services that are not covered by their insurance policy.
A business client is seeking a group plan. It is important for the client that the
coverage allow use of in-network specialists without referrals and access to out-of-
, network providers if necessary. What type of product is likely best for this client?
- answer-Unlike an HMO, participants in a PPO can use out-of-network providers -
although it may cost more for the participant to do so. In addition, because there is
no need for a referral from one's primary care physician in order to see a specialist,
participants have more flexibility with a PPO.
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT?
- answer-Medical Underwriting exam.
A grace period allows the premium payor a period of time to pay overdue
premiums. How long is a grace period typically?
- answer-30 days
- A grace period is typically 30 days. The premium payor can meet outstanding
dues within 30 days to keep the policy in force without requiring any proof of
insurability.
A group conversion option may be used in all the following instances EXCEPT?
- answer-A life-changing event, such as marriage, divorce, or childbirth.
A life insurance policy beneficiary must take receipt of the proceeds within 2 years
of the insured's death.
- answer-False
A beneficiary is not required to take receipt of proceeds within a specific amount
of time, and they may even leave the funds on deposit at the insurance company
A new start-up internet company, Ecompany, applied for a business loan. The bank
was concerned with the company's lack of assets and asked that its executives take
out life insurance policies with the bank as a beneficiary. The bank's request
violated the Federal Insurance Office Act of 2010 under Dodd-Frank.
- answer-False
Lenders often require business borrowers to purchase life insurance as a way of
ensuring that the loaned funds will be paid off.
A person in excellent health may be placed into the ____________ category on his
or her life insurance policy.
- answer-Those who are considered to be in excellent health present less of a risk
to the insurance company in terms of the likelihood of having to pay claims.
Because of this, these insureds are typically placed in the preferred risk category.
In many cases, these insureds may even receive a discount on their premium.
