PSI L & H STUDY QUESTIONS ACTUAL EXAM/ MOSTLY TESTED
QUESTIONS AND CORRECT DETAILED ANSWERS| 100%
CORRECT SOLUTIONS/GRADE A+
Which method of handling risk represents an insured's attempt to refrain from risk?
Ans: Avoidance
Qiz What does an application for insurance contractually represent for the insured?
Ans: An offer
Qiz What type of authority is in writing and allows a producer to act on behalf of the insurer?
Ans: Express
Qiz Which of the following are defined as a part of the policy and can void the policy if they are
breached, whether the breach was intentional or unintentional?
Ans: Warranties
,Qiz What is an application submitted to an insurance company without premium legally considered to
be?
Ans: An invitation to make an offer
Qiz Which is NOT a required element of a legal contract?
Ans: Assignment
Qiz Which best describes the purpose of insurance?
Ans: Transfer of risk
Qiz Which is the best definition of risk?
Ans: Change of loss
Qiz An insurance policy's gross premium is calculated in which of the following ways?
Ans: Mortality - Interest + Expenses
Qiz Which type of insurance provides benefits for expenses incurred as a result of hospitalization,
surgical procedures, and outpatient expenses such as office visits, laboratory tests, and diagnostic
services?
,Ans: Medical expense
Qiz Which of the following policies provides a specified income benefit if an insured person become
incapable of working?
Ans: Disability income
Qiz A company decides to purchase Key Employee Life Insurance for its vice president of operations. All
of the following statements are correct EXCEPT the
Ans: employee names the beneficiary.
Qiz What type of insurance should a company purchase if it wants to insure the life of its CEO?
Ans: Key person insurance
Qiz How do warranties differ form representations?
Ans: A warranty is guaranteed to be true, a representation is believed to be true to the best of one's
knowledge.
Qiz Which of the following occurs immediately after the application is submitted and the initial premium
paid?
Ans: The underwriting process begins.
, Qiz The policy that is designed to provide nursing home benefits on an extended basis for NOT less than
12 consecutive months is
Ans: Long-Term Care.
Qiz A consumer report used to determine eligibility for insurance may include all of the following
EXCEPT
Ans: Medical underwriting exam.
Qiz Which of the following refers to how often a premiums is paid?
Ans: Mode
Qiz Which factor is NOT important in life insurance underwriting?
Ans: Martial status
Qiz Who created the Medical Information Bureau and why was it created?
Ans: The insurance companies to use as an underwriting tool
Qiz How do insurance companies protect themselves against adverse selection when underwriting
individual health insurance policies?
Ans: They pay for AIDS testing of all applicants.
QUESTIONS AND CORRECT DETAILED ANSWERS| 100%
CORRECT SOLUTIONS/GRADE A+
Which method of handling risk represents an insured's attempt to refrain from risk?
Ans: Avoidance
Qiz What does an application for insurance contractually represent for the insured?
Ans: An offer
Qiz What type of authority is in writing and allows a producer to act on behalf of the insurer?
Ans: Express
Qiz Which of the following are defined as a part of the policy and can void the policy if they are
breached, whether the breach was intentional or unintentional?
Ans: Warranties
,Qiz What is an application submitted to an insurance company without premium legally considered to
be?
Ans: An invitation to make an offer
Qiz Which is NOT a required element of a legal contract?
Ans: Assignment
Qiz Which best describes the purpose of insurance?
Ans: Transfer of risk
Qiz Which is the best definition of risk?
Ans: Change of loss
Qiz An insurance policy's gross premium is calculated in which of the following ways?
Ans: Mortality - Interest + Expenses
Qiz Which type of insurance provides benefits for expenses incurred as a result of hospitalization,
surgical procedures, and outpatient expenses such as office visits, laboratory tests, and diagnostic
services?
,Ans: Medical expense
Qiz Which of the following policies provides a specified income benefit if an insured person become
incapable of working?
Ans: Disability income
Qiz A company decides to purchase Key Employee Life Insurance for its vice president of operations. All
of the following statements are correct EXCEPT the
Ans: employee names the beneficiary.
Qiz What type of insurance should a company purchase if it wants to insure the life of its CEO?
Ans: Key person insurance
Qiz How do warranties differ form representations?
Ans: A warranty is guaranteed to be true, a representation is believed to be true to the best of one's
knowledge.
Qiz Which of the following occurs immediately after the application is submitted and the initial premium
paid?
Ans: The underwriting process begins.
, Qiz The policy that is designed to provide nursing home benefits on an extended basis for NOT less than
12 consecutive months is
Ans: Long-Term Care.
Qiz A consumer report used to determine eligibility for insurance may include all of the following
EXCEPT
Ans: Medical underwriting exam.
Qiz Which of the following refers to how often a premiums is paid?
Ans: Mode
Qiz Which factor is NOT important in life insurance underwriting?
Ans: Martial status
Qiz Who created the Medical Information Bureau and why was it created?
Ans: The insurance companies to use as an underwriting tool
Qiz How do insurance companies protect themselves against adverse selection when underwriting
individual health insurance policies?
Ans: They pay for AIDS testing of all applicants.
