PSi Exam Questions with Complete
Solutions
Which statement is NOT a characteristic of Group Life Insurance Plans? - ANSWERS-Individual
Underwriting
Individuals who are eligible for Medicare on the first day of the month in which they turn age 65
are automatically enrolled in: - ANSWERS-Part B
A contract will be deemed invalid if: - ANSWERS-One party was not competent
Which of the following is an example of a moral hazard? - ANSWERS-An individual sets fire to a
building to collect the insurance money
Which of the following insurance policies pays a specific amount of insurance for each day an
individual is hospitalized? - ANSWERS-Hospital Indemnity Insurance
Without written consent, a policy owner CAN NOT change the beneficiary if he has named: -
ANSWERS-An irrevocable beneficiary
Which of the following would be the most appropriate reason for a 35-year-old male in good
health, who is the father of school-aged children, to purchase term life insurance? - ANSWERS-
Provide financial security for dependents
Reinsurance is a specialized branch of the insurance industry because they: - ANSWERS-Insure
Insurers
,On an individual insurance application, which of the following signatures is NOT Required? -
ANSWERS-Insurer
Which is an accurate statement regarding the taxation of personal life insurance? - ANSWERS-
Lump sum death benefits are income tax free
If an insurer determined the insured is totally disabled, the policy owner is relieved of paying
the policy premium as long as the disability continues. This statement describes the: -
ANSWERS-Waiver of premium rider
Which of the following is an example of risk sharing? - ANSWERS-Purchasing an insurance policy
to cover liability exposures
In Nebraska, Insurance companies must charge the same rate for disability income insurance for
individuals: - ANSWERS-Of the same class and same hazard
The primary reason for purchasing life insurance is to provide: - ANSWERS-death benefits
Which of the following is a characteristic of level premium life insurance? - ANSWERS-It can be
used for cash value
Who does not have insurable interest in the insured? - ANSWERS-The insured's neighbor
How many days after a major medical policy is delivered does a consumer have to return it for a
full refund? - ANSWERS-10 days
The person who can request changes to an individual life insurance contract is the: - ANSWERS-
Policy owner
, Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date
the: - ANSWERS-Policy is delivered and accepted
Which of the following individuals is required to be licensed as an insurance consultant in the
State of Nebraska? - ANSWERS-A person providing insurance advice for a fee
Publishing an article which includes false statements about the financial condition of an insurer
is an example of: - ANSWERS-Defamation
Lightning strikes a house and damages the roof. This represents which type of loss? - ANSWERS-
Direct
Under Nebraska constitution rules, an employer with fewer than 20 employees must allow
terminated employees to continue sickness and accident coverage for at least: - ANSWERS-12
months
Risks are generally NOT insurable if: - ANSWERS-no individuals have ever experienced a similar
loss
If a policy owner selects a settlement option prior to maturity, who has the ability to change
that option? - ANSWERS-No one
What is the purpose of the Insurance Frauds prevention Act? - ANSWERS-Protects consumers
against illegal activity in the insurance of policies and payment of claims.
Which statement is true regarding the annuitant? - ANSWERS-Annuity payments will be based
on the annuitant's life expectancy.
Solutions
Which statement is NOT a characteristic of Group Life Insurance Plans? - ANSWERS-Individual
Underwriting
Individuals who are eligible for Medicare on the first day of the month in which they turn age 65
are automatically enrolled in: - ANSWERS-Part B
A contract will be deemed invalid if: - ANSWERS-One party was not competent
Which of the following is an example of a moral hazard? - ANSWERS-An individual sets fire to a
building to collect the insurance money
Which of the following insurance policies pays a specific amount of insurance for each day an
individual is hospitalized? - ANSWERS-Hospital Indemnity Insurance
Without written consent, a policy owner CAN NOT change the beneficiary if he has named: -
ANSWERS-An irrevocable beneficiary
Which of the following would be the most appropriate reason for a 35-year-old male in good
health, who is the father of school-aged children, to purchase term life insurance? - ANSWERS-
Provide financial security for dependents
Reinsurance is a specialized branch of the insurance industry because they: - ANSWERS-Insure
Insurers
,On an individual insurance application, which of the following signatures is NOT Required? -
ANSWERS-Insurer
Which is an accurate statement regarding the taxation of personal life insurance? - ANSWERS-
Lump sum death benefits are income tax free
If an insurer determined the insured is totally disabled, the policy owner is relieved of paying
the policy premium as long as the disability continues. This statement describes the: -
ANSWERS-Waiver of premium rider
Which of the following is an example of risk sharing? - ANSWERS-Purchasing an insurance policy
to cover liability exposures
In Nebraska, Insurance companies must charge the same rate for disability income insurance for
individuals: - ANSWERS-Of the same class and same hazard
The primary reason for purchasing life insurance is to provide: - ANSWERS-death benefits
Which of the following is a characteristic of level premium life insurance? - ANSWERS-It can be
used for cash value
Who does not have insurable interest in the insured? - ANSWERS-The insured's neighbor
How many days after a major medical policy is delivered does a consumer have to return it for a
full refund? - ANSWERS-10 days
The person who can request changes to an individual life insurance contract is the: - ANSWERS-
Policy owner
, Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date
the: - ANSWERS-Policy is delivered and accepted
Which of the following individuals is required to be licensed as an insurance consultant in the
State of Nebraska? - ANSWERS-A person providing insurance advice for a fee
Publishing an article which includes false statements about the financial condition of an insurer
is an example of: - ANSWERS-Defamation
Lightning strikes a house and damages the roof. This represents which type of loss? - ANSWERS-
Direct
Under Nebraska constitution rules, an employer with fewer than 20 employees must allow
terminated employees to continue sickness and accident coverage for at least: - ANSWERS-12
months
Risks are generally NOT insurable if: - ANSWERS-no individuals have ever experienced a similar
loss
If a policy owner selects a settlement option prior to maturity, who has the ability to change
that option? - ANSWERS-No one
What is the purpose of the Insurance Frauds prevention Act? - ANSWERS-Protects consumers
against illegal activity in the insurance of policies and payment of claims.
Which statement is true regarding the annuitant? - ANSWERS-Annuity payments will be based
on the annuitant's life expectancy.
