PSI Practice Exam| 75 Questions| Correct Answers| Verified

Which of the following occurs immediately after the application is submitted and the initial premium paid? 1. the underwriting process begins 2. the applicant's references are checked 3. the beneficiaries are selected 4. the insurance goes into effect. - ANSWER 1. the underwriting process begins Obtaining consumer information reports under false pretenses is prosecutable by which of the following? 1. USA Patriot Act 2. Fair Credit Reporting Act 3. State laws where the applicant resides 4. Securities and Exchange Commission - ANSWER 2. Fair Credit Reporting Act Which is the major reason why long term care insurance is becoming increasingly important? 1. It is easy to make a profit from investing in long term care 2. As life expectancy increases, the chances of needing long term care also increase 3. Nursing homes only accept Medicare as a secondary insurance source. 4. Many younger people are developing life-threatening conditions and require hospice care. - ANSWER 2. As life expectancy increases, the chances of needing long term care also increase Under which situation must insurable interest exist between the applicant and insured at the time of application? 1. When a third-party applicant names themselves beneficiary. 2. When the applicant and the insured are the same person. 3. When the beneficiary is a member of the applicant's immediate family 4. When a third-party applicant names the insured's company as beneficiary. - ANSWER 1. When a third-party applicant names themselves beneficiary. Which of the following is TRUE of a point of service plan? 1. Patients must submit claim forms for all services received. 2. The difference in cost between in-network and out-of-network is relatively small. 3. A patient's care is coordinated by an in-network primary care physician. 4. A patient may see any provider for any condition for the same cost and does not need to consult a primary care physician. - ANSWER 3. A patient's care is coordinated by an in-network primary care physician. When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? 1. when the taxpayer's medical expenses exceed 5.0% of adjusted gross income during a taxable year 2. when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year 3. any taxpayer who itemizes deductions may deduct their health insurance premiums 4. never because only group owned health insurance premiums may be deducted. - ANSWER 2. when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year All of the following are characteristics of variable whole life EXCEPT 1. the premium is level 2. there is no guaranteed cash value 3. there is no guaranteed minimum death benefit. 4. the agent must be licensed in both insurance and securities. - ANSWER 3. there is no guaranteed minimum death benefit. Which of the following policy types is considered double indemnity? 1. accidental death 2. key employee 3. term life 4. whole life - ANSWER 1. accidental death When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing the applicant a summary of coverage that includes all of the following EXCEPT 1. a detailed and comprehensive summary of the accelerated benefit 2. definitions of the conditions or occurrences triggering payment of the benefit 3. an explanation of any effects an accelerated benefit on the cash value, death benefit, premium payments, and loans. 4. a statement that benefit payments may adversely affect eligibility for Medicaid - ANSWER 1. a detailed and comprehensive summary of the accelerated benefit