replaced.4. Inform the applicant that the new policy face amount must be higher
PSI Insurance Exam than the replaced policy.
Inform the applicant that the new policy face amount must be higher than the
What must the policy summary in a life insurance policy include?1. conditional replaced policy.
receipt and the insurer's home office address2. reserve deposits.3. the name and
address of the insurance agent or broker4. definition of replacement.
the name and address of the insurance agent or broker In order for an insurer to increase the premium on a noncancelable policy, which
of the following MUST be true?1. The premium increase must be in the contract
at the time it is issued.2. The insured develops a medical condition that increases
Which of the following statements is CORRECT about Medicare Supplement risk.3. The insured reaches the age of 65.4. The premium increase must be in
Insurance?1. An agent must provide an outline of coverage to an insured at the line with current inflation rates.
time of policy delivery.2. If an applicant has an existing Medicare Supplement The premium increase must be in the contract at the time it is issued
Policy, the information does not have to be mentioned on the new application.3.
Replacement of a Medicare Supplement Policy is prohibited unless approved by
the Commissioner of Insurance.4. Duplication of Medicare Supplement coverage An agent who offers to pay the first insurance premium as an inducement for an
is prohibited. applicant to purchase a policy may be found guilty of1. rebating.2. twisting.3.
Duplication of Medicare Supplement coverage is prohibited. controlled business.4. unfair discrimination.
rebating
Replacement refers to which of the following?1. replacing an existing policy with What is the purpose of Stranger-originated life insurance (STOLI)?1. the policy is
a new one2. replacing a beneficiary3. replacing one insured with another4. originated primarily or solely for the purpose of resale2. the policy is written so as
replacing the original policy with a copy to avoid proof of insurable interest3. it is a method of insuring a person who has
replacing an existing policy with a new one been previously declined.4. it is a fraudulent policy meant for financial gain of
someone unknown to the insured.
the policy is originated primarily or solely for the purpose of resale
An insured MUST present evidence of insurability and pay all overdue premiums
with interest after a policy has lapsed in order to exercise which policy
provision?1. Conversion.2. Reinstatement.3. Ownership.4. Guaranteed What is the minimum grace period for monthly accident and health insurance
Renewability. policies?1. 7 days2. 10 days3. 31 days4. 90 days
Reinstatement. 31 days
When replacing existing life insurance, what must an agent do?1. Collect the An insurance agent is defined as an individual who transacts business on behalf
in-force policies and send them to the replacing company.2. Specify what of1. a client.2. his/her agency.3. an insured.4. an insurance company.
constitutes the replacement.3. Notify the producer whose policy is being an insurance company
, It has a guaranteed minimum interest rate.
An employee is laid off and converts a group health plan to an individual policy. In
this situation, the new policy1. will include a probationary period.2. will exclude
preexisting conditions for 6 months.3. premium rate will be higher than the group Which of the following lists the three common types of permanent individual life
rate.4. requires evidence of insurability. insurance?1.
premium rate will be higher than the group rate Variable Life, Whole Life, Universal Life2. Whole Life, Incidental Life, Term Life3.
Universal Life, AD&D,Term Life4. Group Life, Whole Life, Variable Life
Variable Life, Whole Life, Universal Life
Which of the following is defined as the dollar amount beyond which the insured
no longer participates in the payment of medical expenses?1.
Deductible2. Stop Loss Limit3. Maximum Benefit4. Coinsurance Current assumption whole life policies are sensitive to which of the following? 1.
Stop Loss Limit interest rates2. age of the insured3. health of the insured4. current cash value of
the policy
interest rates
All of the following are characteristics of variable whole life EXCEPT 1.
the premium is level2. there is no guaranteed cash value3. there is no
guaranteed minimum death benefit.4. the agent must be licensed in both When should a buy-sell agreement include a provision for the buy-out of an
insurance and securities. owner's business interest in the event of a disability?1.
there is no guaranteed minimum death benefit. When a company is newly purchased and it is likely the new owner will be
disabled within a year.2. When a takeover of a company with an owner who is in
ill-health occurs.3. When there is a buy-sell agreement funded with disability
A group conversion option may be used in all the following instances EXCEPT1. insurance to buyout the interest of a deceased owner or partner.4. When there is
the termination of the master policy.2. loss of coverage due to loss of a buy-sell agreement funded with life insurance to buyout the interest of a
employment.3. loss of eligibility on the part of a class of insureds.4. a deceased owner or partner.
life-changing event, such as marriage, divorce, or childbirth. When there is a buy-sell agreement funded with life insurance to buyout the
a life-changing event, such as marriage, divorce, or childbirth. interest of a deceased owner or partner.
All of the following are characteristics of COBRA EXCEPT 1. A basic vision care package includes all of the following EXCEPT
qualifying events.2. notification statements.3. continuation of coverage.4. change safety glasses.
in medical privacy procedures.
change in medical privacy procedures.
Which is the major reason why long term care insurance is becoming
increasingly important?
Which of the following is TRUE of an equity-indexed annuity?1. As life expectancy increases, the chances of needing long term care also
It is a variable annuity.2. It may decrease in value.3. It requires a securities increase
license to sell.4. It has a guaranteed minimum interest rate.
PSI Insurance Exam than the replaced policy.
Inform the applicant that the new policy face amount must be higher than the
What must the policy summary in a life insurance policy include?1. conditional replaced policy.
receipt and the insurer's home office address2. reserve deposits.3. the name and
address of the insurance agent or broker4. definition of replacement.
the name and address of the insurance agent or broker In order for an insurer to increase the premium on a noncancelable policy, which
of the following MUST be true?1. The premium increase must be in the contract
at the time it is issued.2. The insured develops a medical condition that increases
Which of the following statements is CORRECT about Medicare Supplement risk.3. The insured reaches the age of 65.4. The premium increase must be in
Insurance?1. An agent must provide an outline of coverage to an insured at the line with current inflation rates.
time of policy delivery.2. If an applicant has an existing Medicare Supplement The premium increase must be in the contract at the time it is issued
Policy, the information does not have to be mentioned on the new application.3.
Replacement of a Medicare Supplement Policy is prohibited unless approved by
the Commissioner of Insurance.4. Duplication of Medicare Supplement coverage An agent who offers to pay the first insurance premium as an inducement for an
is prohibited. applicant to purchase a policy may be found guilty of1. rebating.2. twisting.3.
Duplication of Medicare Supplement coverage is prohibited. controlled business.4. unfair discrimination.
rebating
Replacement refers to which of the following?1. replacing an existing policy with What is the purpose of Stranger-originated life insurance (STOLI)?1. the policy is
a new one2. replacing a beneficiary3. replacing one insured with another4. originated primarily or solely for the purpose of resale2. the policy is written so as
replacing the original policy with a copy to avoid proof of insurable interest3. it is a method of insuring a person who has
replacing an existing policy with a new one been previously declined.4. it is a fraudulent policy meant for financial gain of
someone unknown to the insured.
the policy is originated primarily or solely for the purpose of resale
An insured MUST present evidence of insurability and pay all overdue premiums
with interest after a policy has lapsed in order to exercise which policy
provision?1. Conversion.2. Reinstatement.3. Ownership.4. Guaranteed What is the minimum grace period for monthly accident and health insurance
Renewability. policies?1. 7 days2. 10 days3. 31 days4. 90 days
Reinstatement. 31 days
When replacing existing life insurance, what must an agent do?1. Collect the An insurance agent is defined as an individual who transacts business on behalf
in-force policies and send them to the replacing company.2. Specify what of1. a client.2. his/her agency.3. an insured.4. an insurance company.
constitutes the replacement.3. Notify the producer whose policy is being an insurance company
, It has a guaranteed minimum interest rate.
An employee is laid off and converts a group health plan to an individual policy. In
this situation, the new policy1. will include a probationary period.2. will exclude
preexisting conditions for 6 months.3. premium rate will be higher than the group Which of the following lists the three common types of permanent individual life
rate.4. requires evidence of insurability. insurance?1.
premium rate will be higher than the group rate Variable Life, Whole Life, Universal Life2. Whole Life, Incidental Life, Term Life3.
Universal Life, AD&D,Term Life4. Group Life, Whole Life, Variable Life
Variable Life, Whole Life, Universal Life
Which of the following is defined as the dollar amount beyond which the insured
no longer participates in the payment of medical expenses?1.
Deductible2. Stop Loss Limit3. Maximum Benefit4. Coinsurance Current assumption whole life policies are sensitive to which of the following? 1.
Stop Loss Limit interest rates2. age of the insured3. health of the insured4. current cash value of
the policy
interest rates
All of the following are characteristics of variable whole life EXCEPT 1.
the premium is level2. there is no guaranteed cash value3. there is no
guaranteed minimum death benefit.4. the agent must be licensed in both When should a buy-sell agreement include a provision for the buy-out of an
insurance and securities. owner's business interest in the event of a disability?1.
there is no guaranteed minimum death benefit. When a company is newly purchased and it is likely the new owner will be
disabled within a year.2. When a takeover of a company with an owner who is in
ill-health occurs.3. When there is a buy-sell agreement funded with disability
A group conversion option may be used in all the following instances EXCEPT1. insurance to buyout the interest of a deceased owner or partner.4. When there is
the termination of the master policy.2. loss of coverage due to loss of a buy-sell agreement funded with life insurance to buyout the interest of a
employment.3. loss of eligibility on the part of a class of insureds.4. a deceased owner or partner.
life-changing event, such as marriage, divorce, or childbirth. When there is a buy-sell agreement funded with life insurance to buyout the
a life-changing event, such as marriage, divorce, or childbirth. interest of a deceased owner or partner.
All of the following are characteristics of COBRA EXCEPT 1. A basic vision care package includes all of the following EXCEPT
qualifying events.2. notification statements.3. continuation of coverage.4. change safety glasses.
in medical privacy procedures.
change in medical privacy procedures.
Which is the major reason why long term care insurance is becoming
increasingly important?
Which of the following is TRUE of an equity-indexed annuity?1. As life expectancy increases, the chances of needing long term care also
It is a variable annuity.2. It may decrease in value.3. It requires a securities increase
license to sell.4. It has a guaranteed minimum interest rate.
