PSI Life Insurance Exam
Actual Questions and Verified Answers
100% Guarantee Pass
1. 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
2. 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
3. Which of the following statements regarding a pure life annuity payout option is
correct?
Answer: This option provides the highest monthly income.
4. Which of the following does not apply to the time limit on certain defenses
provision in health insurance policies?
Answer: fraudulent misstatements
,5. 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.
6. 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
7. 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.
8. Which of the following is a characteristic of Health Maintenance Organiza-
tions (HMOs)?
Answer: preventive care
9. 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.
10. 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
11. 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.
12. The person who receives the benefit of an annuity is known as the
Answer: annuitant.
13. Which of the following is an example of a premium payment mode?
Answer: annual premium payment
14. 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.
15. Which of the following is true for most comprehensive dental policies?
Answer: Routine care is provided without coinsurance or deductibles.
16. Under a Medicare Supplement Policy, preexisting conditions CANNOT be
excluded after how many months from the effective date of the policy?
Answer: 6 months
17. What does an application for insurance contractually represent for the in-
, sured?
Answer: an otter
18. Which of the following is exempted from the incontestability provision in
insurance policies?
Answer: fraudulent misstatements
19. 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
20. How long after being entitled to Social Security disability benefits will an
individual be eligible to receive Medicare benefits?
Answer: 2 years
21. If a policy is determined to be a Modified Endowment Contract (MEC), funds
received under the policy will be
Answer: considered taxable income first.
22. Which type of annuity attempts to offset inflation by providing a benefit
linked to an underlying investment account?
Answer: variable
Actual Questions and Verified Answers
100% Guarantee Pass
1. 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
2. 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
3. Which of the following statements regarding a pure life annuity payout option is
correct?
Answer: This option provides the highest monthly income.
4. Which of the following does not apply to the time limit on certain defenses
provision in health insurance policies?
Answer: fraudulent misstatements
,5. 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.
6. 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
7. 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.
8. Which of the following is a characteristic of Health Maintenance Organiza-
tions (HMOs)?
Answer: preventive care
9. 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.
10. 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
11. 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.
12. The person who receives the benefit of an annuity is known as the
Answer: annuitant.
13. Which of the following is an example of a premium payment mode?
Answer: annual premium payment
14. 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.
15. Which of the following is true for most comprehensive dental policies?
Answer: Routine care is provided without coinsurance or deductibles.
16. Under a Medicare Supplement Policy, preexisting conditions CANNOT be
excluded after how many months from the effective date of the policy?
Answer: 6 months
17. What does an application for insurance contractually represent for the in-
, sured?
Answer: an otter
18. Which of the following is exempted from the incontestability provision in
insurance policies?
Answer: fraudulent misstatements
19. 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
20. How long after being entitled to Social Security disability benefits will an
individual be eligible to receive Medicare benefits?
Answer: 2 years
21. If a policy is determined to be a Modified Endowment Contract (MEC), funds
received under the policy will be
Answer: considered taxable income first.
22. Which type of annuity attempts to offset inflation by providing a benefit
linked to an underlying investment account?
Answer: variable
