PSI Insurance Exam questions and
answers 2026\2027 A+ Grade
What is it called when a life insurance policy pays a multiple of the coverage amount when certain types
of accidents occur?
- correct answer multiple indemnity
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?
- correct answer 30 days
Which of the following statements regarding a pure life annuity payout option is correct?
- correct answer This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision in health insurance
policies?
- correct answer fraudulent misstatements
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?
- correct answer The individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
When can the premiums of an individually owned health insurance policy be deducted from the
individual's income tax?
- correct answer when the taxpayer's unreimbursed medical expenses exceed 7.5% of adjusted gross
income during a taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during
the policy's initial
- correct answer 2 year period.
,Which of the following is a characteristic of Health Maintenance Organizations (HMOs)?
- correct answer preventive care
The life insurance policy will not be truly effective until all of the following occur EXCEPT
- correct answer the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and insured at the time of
application?
- correct answer when a third-party applicant names themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy?
- correct answer The cash value earnings are based on the performance of the separate account.
The person who receives the benefit of an annuity is known as the
- correct answer annuitant.
Which of the following is an example of a premium payment mode?
- correct answer annual premium payment
How do most disability policies handle the case of a recurrent disability occurring at least 90 days after
the first claim?
- correct answer it must be handled as a new claim for a new period of disability, requiring a new
elimination period.
Which of the following is true for most comprehensive dental policies?
- correct answer Routine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how many
months from the effective date of the policy?
- correct answer 6 months
What does an application for insurance contractually represent for the insured?
- correct answer an offer
, Which of the following is exempted from the incontestability provision in insurance policies?
- correct answer fraudulent misstatements
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?
- correct answer elimination period
How long after being entitled to Social Security disability benefits will an individual be eligible to receive
Medicare benefits?
- correct answer 2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the policy
will be
- correct answer considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying
investment account?
- correct answer variable
What is a MIB report?
- correct answer medical information on an applicant for assessing life or health insurance risk
Group Life Policies typically include which of the following provisions?
- correct answer conversion privilege
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?
- correct answer The individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is known as
- correct answer exclusion.
answers 2026\2027 A+ Grade
What is it called when a life insurance policy pays a multiple of the coverage amount when certain types
of accidents occur?
- correct answer multiple indemnity
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?
- correct answer 30 days
Which of the following statements regarding a pure life annuity payout option is correct?
- correct answer This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision in health insurance
policies?
- correct answer fraudulent misstatements
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?
- correct answer The individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
When can the premiums of an individually owned health insurance policy be deducted from the
individual's income tax?
- correct answer when the taxpayer's unreimbursed medical expenses exceed 7.5% of adjusted gross
income during a taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during
the policy's initial
- correct answer 2 year period.
,Which of the following is a characteristic of Health Maintenance Organizations (HMOs)?
- correct answer preventive care
The life insurance policy will not be truly effective until all of the following occur EXCEPT
- correct answer the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and insured at the time of
application?
- correct answer when a third-party applicant names themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy?
- correct answer The cash value earnings are based on the performance of the separate account.
The person who receives the benefit of an annuity is known as the
- correct answer annuitant.
Which of the following is an example of a premium payment mode?
- correct answer annual premium payment
How do most disability policies handle the case of a recurrent disability occurring at least 90 days after
the first claim?
- correct answer it must be handled as a new claim for a new period of disability, requiring a new
elimination period.
Which of the following is true for most comprehensive dental policies?
- correct answer Routine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how many
months from the effective date of the policy?
- correct answer 6 months
What does an application for insurance contractually represent for the insured?
- correct answer an offer
, Which of the following is exempted from the incontestability provision in insurance policies?
- correct answer fraudulent misstatements
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?
- correct answer elimination period
How long after being entitled to Social Security disability benefits will an individual be eligible to receive
Medicare benefits?
- correct answer 2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the policy
will be
- correct answer considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying
investment account?
- correct answer variable
What is a MIB report?
- correct answer medical information on an applicant for assessing life or health insurance risk
Group Life Policies typically include which of the following provisions?
- correct answer conversion privilege
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?
- correct answer The individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is known as
- correct answer exclusion.
