PSI - NY LIFE, ACCIDENT AND HEALTH PRACTICE EXAM
530 QUESTIONS WITH 100% CORRECT VERIFIED ANSWERS
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? - ANSWER - Free Look
When will a policy pay on a UCR basis? - ANSWER - 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? - ANSWER - long term care rider
Which of the following is exempted from the incontestability provision in
insurance policies? - ANSWER - Fraudulent misstatements
What does first dollar coverage mean? - ANSWER - As soon as covered medical
expenses are incurred, the policy begins to pay
What is the waiver of premium provision? - ANSWER - 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 - ANSWER - for
claims involving periodic payments
1
,Which is a disadvantage to a flexible premium annuity? - ANSWER - 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 - ANSWER - 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? - ANSWER - 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? -
ANSWER - 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? - ANSWER -
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: - ANSWER - 2 year period
What does coinsurance mean? - ANSWER - 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? - ANSWER - Notice of claim
2
,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? - ANSWER - The policy owner has named an irrevocable
beneficiary
Which of the following refers to how often a premium is paid? - ANSWER - Mode
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER - Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by
whom are they determined? - ANSWER - At the time the policy is purchased by
the owner of the policy
All of the following are ownership rights EXCEPT - ANSWER - Switching the
policy from one insured to another
All of the following are TRUE regarding incomplete applications EXCEPT -
ANSWER - 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 - ANSWER - Medical underwriting exam
All of the following are required signatures on a life insurance application
EXCEPT - ANSWER - The minor in a juvenile policy
Why are insurance policies considered conditional contracts? - ANSWER - Certain
conditions need to be met to make the contract legally enforceable.
3
, When does insurable interest come into play in a life insurance policy? - ANSWER
- 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? - ANSWER - the underwriting process begins
Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER - Fair Credit Reporting Act
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER -
the policy is originated primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT - ANSWER - non-nicotine
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER - 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? - ANSWER - The applicant and possibly the agent initial
any changes made.
What is a MIB report? - ANSWER - medical information on an applicant for
assessing life or health insurance risk
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.
4
530 QUESTIONS WITH 100% CORRECT VERIFIED ANSWERS
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? - ANSWER - Free Look
When will a policy pay on a UCR basis? - ANSWER - 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? - ANSWER - long term care rider
Which of the following is exempted from the incontestability provision in
insurance policies? - ANSWER - Fraudulent misstatements
What does first dollar coverage mean? - ANSWER - As soon as covered medical
expenses are incurred, the policy begins to pay
What is the waiver of premium provision? - ANSWER - 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 - ANSWER - for
claims involving periodic payments
1
,Which is a disadvantage to a flexible premium annuity? - ANSWER - 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 - ANSWER - 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? - ANSWER - 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? -
ANSWER - 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? - ANSWER -
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: - ANSWER - 2 year period
What does coinsurance mean? - ANSWER - 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? - ANSWER - Notice of claim
2
,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? - ANSWER - The policy owner has named an irrevocable
beneficiary
Which of the following refers to how often a premium is paid? - ANSWER - Mode
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER - Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by
whom are they determined? - ANSWER - At the time the policy is purchased by
the owner of the policy
All of the following are ownership rights EXCEPT - ANSWER - Switching the
policy from one insured to another
All of the following are TRUE regarding incomplete applications EXCEPT -
ANSWER - 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 - ANSWER - Medical underwriting exam
All of the following are required signatures on a life insurance application
EXCEPT - ANSWER - The minor in a juvenile policy
Why are insurance policies considered conditional contracts? - ANSWER - Certain
conditions need to be met to make the contract legally enforceable.
3
, When does insurable interest come into play in a life insurance policy? - ANSWER
- 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? - ANSWER - the underwriting process begins
Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER - Fair Credit Reporting Act
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER -
the policy is originated primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT - ANSWER - non-nicotine
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER - 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? - ANSWER - The applicant and possibly the agent initial
any changes made.
What is a MIB report? - ANSWER - medical information on an applicant for
assessing life or health insurance risk
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.
4
