PSI - NY Life, Accident and Health Practice Exam 17-
55, Just my cards + 199+ 75 ( TEST) (LOT)| 527
QUESTIONS| WITH COMPLETE SOLUTIONS
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? Correct Answer: Free Look
When will a policy pay on a UCR basis? Correct 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? Correct Answer: long term care rider
Which of the following is exempted from the incontestability provision in insurance policies?
Correct Answer: Fraudulent misstatements
What does first dollar coverage mean? Correct Answer: As soon as covered medical expenses
are incurred, the policy begins to pay
What is the waiver of premium provision? Correct 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 Correct Answer: for claims involving
periodic payments
Which is a disadvantage to a flexible premium annuity? Correct 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 Correct 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? Correct 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? Correct 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? Correct 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: Correct Answer: 2 year period
What does coinsurance mean? Correct 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?
Correct Answer: Notice of claim
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? Correct
Answer: The policy owner has named an irrevocable beneficiary
Which of the following refers to how often a premium is paid? Correct Answer: Mode
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while Correct Answer: Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by whom are
they determined? Correct Answer: At the time the policy is purchased by the owner of the
policy
All of the following are ownership rights EXCEPT Correct Answer: Switching the policy from
one insured to another
All of the following are TRUE regarding incomplete applications EXCEPT Correct 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 Correct Answer: Medical underwriting exam
All of the following are required signatures on a life insurance application EXCEPT Correct
Answer: The minor in a juvenile policy
Why are insurance policies considered conditional contracts? Correct Answer: Certain
conditions need to be met to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? Correct 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? Correct Answer: the underwriting process begins
,Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? Correct Answer: Fair Credit Reporting Act
What is the purpose of Stranger-originated life insurance (STOLI)? Correct Answer: the policy
is originated primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT Correct Answer: non-nicotine
What specific new procedures does the USA Patriot Act require of insurance companies? Correct
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?
Correct Answer: The applicant and possibly the agent initial any changes made.
What is a MIB report? Correct Answer: medical information on an applicant for assessing life or
health insurance risk
How do warranties differ from representations? Correct Answer: a warranty is guaranteed to be
true, a representation is believed to be true to the best of one's knowledge.
If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of
all of the following EXCEPT Correct Answer: the treatment procedures that are covered by the
policy.
Which of the following was specifically designed to address STOLI and IOLI practices? Correct
Answer: NCOIL Act
Why is rehabilitation considered worthy of federal help under workers' compensation? Correct
Answer: it reduces insurance losses and helps regain the worker's dignity
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 group conversion option is allowed for all of the following EXCEPT Correct Answer:
during the annual benefits enrollment period.
What type of insurance should a company purchase if it wants to insure the life of its CEO?
Correct Answer: key person insurance
All of the following are tax qualified retirement plans EXCEPT Correct Answer: Section 529
plan.
, Why is relying solely on employer group life insurance generally considered inadequate for most
individual's needs? Correct Answer: It is financially insufficient to cover end of life expenses.
For an individual long-term care policy there is an annual dollar limit for tax deductions that is
based on which of the following? Correct Answer: age
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 medical expenses exceed 7.5% of
adjusted gross income during a taxable year
In noncontributory plans, which percentage of eligible members must participate? Correct
Answer: 100%
Short term disability insurance generally only covers injuries due to which of the following?
Correct Answer: Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT Correct Answer:
transferring the management of costs to the insureds.
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 characteristic of a nonqualified plan? Correct Answer: plan does not
meet federal guidelines for tax benefits
In a home healthcare benefit, all of the following are eligible expenses EXCEPT Correct
Answer: blood transfusions
All of the following are requirements to qualify for Social Security disability benefits EXCEPT
when Correct Answer: unable to work in occupation in which the worker was trained or
educated
How long after being entitled to disability benefits will an individual be eligible to receive
Medicare benefits? Correct Answer: 2 years
Which of the following amends the Social Security Act to make Medicare secondary to group
health plans? Correct Answer: TEFRA
Which of the following is TRUE of a point of service plan? Correct Answer: A patient's care is
coordinated by an in-network primary care physician.
A group conversion option may be used in all the following instances EXCEPT Correct Answer:
a life-changing event, such as marriage, divorce, or childbirth
Which problem was universal life insurance designed to address? Correct Answer: low interest
rates during periods of high inflation
55, Just my cards + 199+ 75 ( TEST) (LOT)| 527
QUESTIONS| WITH COMPLETE SOLUTIONS
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? Correct Answer: Free Look
When will a policy pay on a UCR basis? Correct 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? Correct Answer: long term care rider
Which of the following is exempted from the incontestability provision in insurance policies?
Correct Answer: Fraudulent misstatements
What does first dollar coverage mean? Correct Answer: As soon as covered medical expenses
are incurred, the policy begins to pay
What is the waiver of premium provision? Correct 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 Correct Answer: for claims involving
periodic payments
Which is a disadvantage to a flexible premium annuity? Correct 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 Correct 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? Correct 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? Correct 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? Correct 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: Correct Answer: 2 year period
What does coinsurance mean? Correct 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?
Correct Answer: Notice of claim
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? Correct
Answer: The policy owner has named an irrevocable beneficiary
Which of the following refers to how often a premium is paid? Correct Answer: Mode
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while Correct Answer: Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by whom are
they determined? Correct Answer: At the time the policy is purchased by the owner of the
policy
All of the following are ownership rights EXCEPT Correct Answer: Switching the policy from
one insured to another
All of the following are TRUE regarding incomplete applications EXCEPT Correct 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 Correct Answer: Medical underwriting exam
All of the following are required signatures on a life insurance application EXCEPT Correct
Answer: The minor in a juvenile policy
Why are insurance policies considered conditional contracts? Correct Answer: Certain
conditions need to be met to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? Correct 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? Correct Answer: the underwriting process begins
,Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? Correct Answer: Fair Credit Reporting Act
What is the purpose of Stranger-originated life insurance (STOLI)? Correct Answer: the policy
is originated primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT Correct Answer: non-nicotine
What specific new procedures does the USA Patriot Act require of insurance companies? Correct
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?
Correct Answer: The applicant and possibly the agent initial any changes made.
What is a MIB report? Correct Answer: medical information on an applicant for assessing life or
health insurance risk
How do warranties differ from representations? Correct Answer: a warranty is guaranteed to be
true, a representation is believed to be true to the best of one's knowledge.
If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of
all of the following EXCEPT Correct Answer: the treatment procedures that are covered by the
policy.
Which of the following was specifically designed to address STOLI and IOLI practices? Correct
Answer: NCOIL Act
Why is rehabilitation considered worthy of federal help under workers' compensation? Correct
Answer: it reduces insurance losses and helps regain the worker's dignity
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 group conversion option is allowed for all of the following EXCEPT Correct Answer:
during the annual benefits enrollment period.
What type of insurance should a company purchase if it wants to insure the life of its CEO?
Correct Answer: key person insurance
All of the following are tax qualified retirement plans EXCEPT Correct Answer: Section 529
plan.
, Why is relying solely on employer group life insurance generally considered inadequate for most
individual's needs? Correct Answer: It is financially insufficient to cover end of life expenses.
For an individual long-term care policy there is an annual dollar limit for tax deductions that is
based on which of the following? Correct Answer: age
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 medical expenses exceed 7.5% of
adjusted gross income during a taxable year
In noncontributory plans, which percentage of eligible members must participate? Correct
Answer: 100%
Short term disability insurance generally only covers injuries due to which of the following?
Correct Answer: Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT Correct Answer:
transferring the management of costs to the insureds.
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 characteristic of a nonqualified plan? Correct Answer: plan does not
meet federal guidelines for tax benefits
In a home healthcare benefit, all of the following are eligible expenses EXCEPT Correct
Answer: blood transfusions
All of the following are requirements to qualify for Social Security disability benefits EXCEPT
when Correct Answer: unable to work in occupation in which the worker was trained or
educated
How long after being entitled to disability benefits will an individual be eligible to receive
Medicare benefits? Correct Answer: 2 years
Which of the following amends the Social Security Act to make Medicare secondary to group
health plans? Correct Answer: TEFRA
Which of the following is TRUE of a point of service plan? Correct Answer: A patient's care is
coordinated by an in-network primary care physician.
A group conversion option may be used in all the following instances EXCEPT Correct Answer:
a life-changing event, such as marriage, divorce, or childbirth
Which problem was universal life insurance designed to address? Correct Answer: low interest
rates during periods of high inflation
