PSI Life Accident and Health Final Practice Exam Questions and Answer

PSI Life Accident and Health Final Practice Exam Questions and Answers Dividends that are received by a life insurance policy holder can be taxed in what situation(s): I - When the dividend amount received exceeds the amount that the policy holder paid in premiums - CORRECT ANSWER-The amount received that is over and above the amount paid into the policy via premiums is considered to be gain and is therefore taxable. There are no dividends paid on term life insurance policies. Under the misstatement of age or gender provision, what happens if it is determined at death that the insured's age or gender was misstated on a life insurance policy application? - CORRECT ANSWER-Benefits are adjusted to an amount that the premium would have purchased at the correct age or gender. 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 thereafter as is reasonably possible? - CORRECT ANSWER-Notice of claim. When will a policy pay on a UCR basis? - CORRECT ANSWER-When particular benefits are not listed on a payment schedule. All of the following are non-forfeiture options EXCEPT - CORRECT ANSWER-Cash dividend option. What happens when the lifetime maximum benefit limit has been reached? - CORRECT ANSWER-The insured will pay all of the remaining medial costs for as long as the policy is in force. Whose responsibility is it to make sure that the company is notified of a death claim at the earliest possible opportunity (in most cases)? - CORRECT ANSWER-The producer. 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. All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while? - CORRECT ANSWER-Committing a misdemeanor Which is a disadvantage to a flexible premium annuity? - CORRECT ANSWER-The actual amount of the annuity benefit cannot be determined in advance. What does coninsurance mean? - CORRECT ANSWER-The insurer and the insured share expenses over the deductible. Under normal conditions which of the following is TRUE for proof of loss when a single loss is claimed? - CORRECT ANSWER-The insured has 90 days from the date of loss to provide proof of loss. 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. All of the following statements define preexisting conditions EXCEPT? - CORRECT ANSWER-Any chronic health condition that presents symptoms and which was unknown at the time of application. Which is the difference between participating and non-participating? - CORRECT ANSWER-Participating policies pay dividends while non-participating policies do not. How does the per captia rule apply to proceeds from a life insurance policy? - CORRECT ANSWER-The proceeds are divided equally among living primary