PSI LIFE INSURANCE EXAM LATEST REAL EXAM 100+
QUESTIONS AND CORRECT ANSWERS|AGRADE
During which period of a Disability Income Policy is coverage effective but during
which no benefits will be paid under the policy? - ANSWER: Probationary period
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER: committing a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than
obtaining a new one? - ANSWER: insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? -
ANSWER: With the noncancelable policy the insurer may increase premiums only
based on the terms of the policy.
What does first dollar coverage mean? - ANSWER: As soon as covered medical
expenses are incurred, the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against the
insurer after written proof of loss is provided? - ANSWER: 3 years
What is a MIB report? - ANSWER: medical information on an applicant for assessing
life or health insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT - ANSWER:
the incomplete application can be accepted with the missing information added
later.
Why are insurance policies considered conditional contracts? - 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? - ANSWER:
when the applicant for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of
application, regardless of the applicant's insurability? - ANSWER: binding receipt
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER: Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER: he
policy originated primarily or solely for the purpose of resale.
How do warranties differ from representations? - ANSWER: a warranty is guaranteed
to be true, a representation is believed to be true to the best of one's knowledge.
, Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER: Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI practices?
- ANSWER: NCOIL Act
Which of the following occurs immediately after the application is submitted and the
initial premium paid? - ANSWER: the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of the
following EXCEPT - ANSWER: medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following? - ANSWER: age
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.
In noncontributory plans, which percentage of eligible members must participate? -
ANSWER: 100%
When can the premiums of an individually owned health insurance policy be
deducted from the individual's income tax? - ANSWER: When the taxpayer's medical
expenses exceed 7.5% of adjusted gross income during a taxable year
Short term disability insurance generally only covers injuries due to which of the
following? - ANSWER: Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT -
ANSWER: transferring the management of costs to the insureds.
Why is rehabilitation considered worthy of federal help under workers'
compensation? - ANSWER: it reduces insurance losses and helps regain the worker's
dignity
What type of insurance should a company purchase if it wants to insure the life of its
CEO? - ANSWER: key person insurance
The group conversion option is allowed for all of the following EXCEPT - ANSWER:
during the annual benefits enrollment period
All of the following are tax qualified retirement plans EXCEPT - ANSWER: Section 529
plan
QUESTIONS AND CORRECT ANSWERS|AGRADE
During which period of a Disability Income Policy is coverage effective but during
which no benefits will be paid under the policy? - ANSWER: Probationary period
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER: committing a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than
obtaining a new one? - ANSWER: insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? -
ANSWER: With the noncancelable policy the insurer may increase premiums only
based on the terms of the policy.
What does first dollar coverage mean? - ANSWER: As soon as covered medical
expenses are incurred, the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against the
insurer after written proof of loss is provided? - ANSWER: 3 years
What is a MIB report? - ANSWER: medical information on an applicant for assessing
life or health insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT - ANSWER:
the incomplete application can be accepted with the missing information added
later.
Why are insurance policies considered conditional contracts? - 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? - ANSWER:
when the applicant for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of
application, regardless of the applicant's insurability? - ANSWER: binding receipt
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER: Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER: he
policy originated primarily or solely for the purpose of resale.
How do warranties differ from representations? - ANSWER: a warranty is guaranteed
to be true, a representation is believed to be true to the best of one's knowledge.
, Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER: Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI practices?
- ANSWER: NCOIL Act
Which of the following occurs immediately after the application is submitted and the
initial premium paid? - ANSWER: the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of the
following EXCEPT - ANSWER: medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following? - ANSWER: age
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.
In noncontributory plans, which percentage of eligible members must participate? -
ANSWER: 100%
When can the premiums of an individually owned health insurance policy be
deducted from the individual's income tax? - ANSWER: When the taxpayer's medical
expenses exceed 7.5% of adjusted gross income during a taxable year
Short term disability insurance generally only covers injuries due to which of the
following? - ANSWER: Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT -
ANSWER: transferring the management of costs to the insureds.
Why is rehabilitation considered worthy of federal help under workers'
compensation? - ANSWER: it reduces insurance losses and helps regain the worker's
dignity
What type of insurance should a company purchase if it wants to insure the life of its
CEO? - ANSWER: key person insurance
The group conversion option is allowed for all of the following EXCEPT - ANSWER:
during the annual benefits enrollment period
All of the following are tax qualified retirement plans EXCEPT - ANSWER: Section 529
plan
