PSI Life Insurance Exam Study
Guide – Practice Questions with
Verified Answers. GRADED A+.
Latest 2026/2027 Update
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.
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
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
Guide – Practice Questions with
Verified Answers. GRADED A+.
Latest 2026/2027 Update
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.
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
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
