PSI Life Insurance Guide | Plans, Benefits & Coverage Details

Page 1 of 221


PSI LIFE, ACCIDENT AND HEALTH INSURANCE V1 & V2

EXAMS (LATEST UPDATES STUDY BUNDLE

PACKAGE WITH SOLUTIONS) QUESTIONS & ANSWERS

| GRADE A | 100% CORRECT (VERIFIED 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 .....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?

,Page 2 of 221


.....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?

.....ANSWER.....Notice of claim.

When will a policy pay on a UCR basis? .....ANSWER.....When

particular benefits are not listed on a payment schedule.

All of the following are non-forfeiture options EXCEPT

.....ANSWER.....Cash dividend option.

What happens when the lifetime maximum benefit limit has been

reached? .....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)? .....ANSWER.....The producer.

,Page 3 of 221


What is the waiver of premium provision? .....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?

.....ANSWER.....Committing a misdemeanor

Which is a disadvantage to a flexible premium annuity?

.....ANSWER.....The actual amount of the annuity benefit cannot

be determined in advance.

What does coninsurance mean? .....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? .....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? .....ANSWER.....The

, Page 4 of 221


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? .....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? .....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? .....ANSWER.....The proceeds are divided

equally among living primary beneficiaries.

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.