PREP REVIEW EXAM: LIFE INSURANCE
POLICIES – PSI ACTUAL EXAM QUESTIONS
WITH CORRECT ANSWERS
AYnon-contributoryYhealthYinsuranceYplanYhelpsYtheYinsurerYavoidY-
YCORRECTYANSWERSadverseYselection
TimYisYcoveredYunderYaYgroupYplanYandYwouldYlikeYtoYchangeYhisYgroupYcoverageYtoYanYindividualYp
olicyYwithYtheYsameYinsurerYbecauseYofYemploymentYtermination.YWhichYofYtheseYdescribesYtheYc
hangeYthatYwillYtakeYplace?Y-YCORRECTYANSWERSConversion
UnderYaYgroupYlifeYpolicy,YtheYinsurerYwillYissueYanYindividualY_____YtoYtheYpolicyownerYforYdeliver
yYtoYeachYpersonYinsured.Y-YCORRECTYANSWERScertificate
AYtypeYofYgroupYthatYhasYaYconstitutionYandYbylawsYandYhasYbeenYorganizedYforYpurposesYotherYth
anYobtainingYinsuranceYisYcalledYa(n)Y-YCORRECTYANSWERSassociationYorYlaborYgroup
AllYofYtheYfollowingYareYcharacteristicsYofYaYGroupYLifeYInsuranceYPlanYEXCEPTY-
YCORRECTYANSWERSIndividualYunderwriting
TheYconversionYprivilegeYunderYaYgroupYlifeYplanYallowsYanYemployeeYtoYconvertYtoYa(n)Y-
YCORRECTYANSWERSindividualYplanYuponYemploymentYtermination
JulieYhasYaY$100,000Y30-
yearYmortgageYonYherYnewYhome.YWhatYtypeYofYlifeYinsuranceYcouldYsheYpurchaseYthatYisYdesigned
YtoYpayYoffYtheYloanYbalanceYifYsheYdiesYwithinYtheY30-yearYperiod?Y-
YCORRECTYANSWERSDecreasingYtermYinsurance
, WhatYdoesYtheYGroupYLifeYunderwritingYriskYselectionYprocessYhelpYprotectYinsuranceYcompaniesYf
rom?Y-YCORRECTYANSWERSAdverseYselection
TheYleastYexpensiveYoptionYtoYpayYoffYaY30-yearYmortgageYbalanceYwouldYbeY-
YCORRECTYANSWERSdecreasingYtermYlife
AYlifeYinsuranceYpolicyYthatYisYsubjectYtoYaYcontractYinterestYrateYisYreferredYtoYasY-
YCORRECTYANSWERSuniversalYlife
WhichYofYtheseYfactorsYwouldYanYinsurerYconsiderYwhenYdeterminingYwhetherYtoYacceptYaYgroupYli
feYplan?Y-YCORRECTYANSWERSAverageYage
TheYpremiumYforYaYModifiedYwholeYlifeYpolicyYisY-
YCORRECTYANSWERSlowerYthanYtheYtypicalYwholeYlifeYpolicyYduringYtheYfirstYfewYyearsYandYthenYhi
gherYthanYtypicalYforYtheYremainder
TheYtypeYofYmultipleYprotectionYcoverageYthatYpaysYonYtheYdeathYofYtheYlastYpersonYisYcalledYa(n)Y-
YCORRECTYANSWERSsurvivorshipYlifeYpolicy
TheYtypeYofYpolicyYwhichYpaysYonYtheYdeathYofYtheYlastYpersonYisYcalledY-
YCORRECTYANSWERSsurvivorshipYlife
AnYemployeeYunderYaYgroupYinsuranceYpolicyYhasYtheYrightYtoYnameYaYbeneficiaryYandYtheYrightYtoY
-YCORRECTYANSWERSconvertYtoYanYindividualYpolicyYinYtheYeventYofYemploymentYtermination
AYbusinessYwillYtypicallyYuseYwhichYtypeYofYlifeYinsuranceYtoYcoverYtheirYemployees?Y-
YCORRECTYANSWERSGroupYpolicy
WhatYdoesYtheYwordY"level"YinYLevelYTermYdescribe?Y-YCORRECTYANSWERSTheYfaceYamount
POLICIES – PSI ACTUAL EXAM QUESTIONS
WITH CORRECT ANSWERS
AYnon-contributoryYhealthYinsuranceYplanYhelpsYtheYinsurerYavoidY-
YCORRECTYANSWERSadverseYselection
TimYisYcoveredYunderYaYgroupYplanYandYwouldYlikeYtoYchangeYhisYgroupYcoverageYtoYanYindividualYp
olicyYwithYtheYsameYinsurerYbecauseYofYemploymentYtermination.YWhichYofYtheseYdescribesYtheYc
hangeYthatYwillYtakeYplace?Y-YCORRECTYANSWERSConversion
UnderYaYgroupYlifeYpolicy,YtheYinsurerYwillYissueYanYindividualY_____YtoYtheYpolicyownerYforYdeliver
yYtoYeachYpersonYinsured.Y-YCORRECTYANSWERScertificate
AYtypeYofYgroupYthatYhasYaYconstitutionYandYbylawsYandYhasYbeenYorganizedYforYpurposesYotherYth
anYobtainingYinsuranceYisYcalledYa(n)Y-YCORRECTYANSWERSassociationYorYlaborYgroup
AllYofYtheYfollowingYareYcharacteristicsYofYaYGroupYLifeYInsuranceYPlanYEXCEPTY-
YCORRECTYANSWERSIndividualYunderwriting
TheYconversionYprivilegeYunderYaYgroupYlifeYplanYallowsYanYemployeeYtoYconvertYtoYa(n)Y-
YCORRECTYANSWERSindividualYplanYuponYemploymentYtermination
JulieYhasYaY$100,000Y30-
yearYmortgageYonYherYnewYhome.YWhatYtypeYofYlifeYinsuranceYcouldYsheYpurchaseYthatYisYdesigned
YtoYpayYoffYtheYloanYbalanceYifYsheYdiesYwithinYtheY30-yearYperiod?Y-
YCORRECTYANSWERSDecreasingYtermYinsurance
, WhatYdoesYtheYGroupYLifeYunderwritingYriskYselectionYprocessYhelpYprotectYinsuranceYcompaniesYf
rom?Y-YCORRECTYANSWERSAdverseYselection
TheYleastYexpensiveYoptionYtoYpayYoffYaY30-yearYmortgageYbalanceYwouldYbeY-
YCORRECTYANSWERSdecreasingYtermYlife
AYlifeYinsuranceYpolicyYthatYisYsubjectYtoYaYcontractYinterestYrateYisYreferredYtoYasY-
YCORRECTYANSWERSuniversalYlife
WhichYofYtheseYfactorsYwouldYanYinsurerYconsiderYwhenYdeterminingYwhetherYtoYacceptYaYgroupYli
feYplan?Y-YCORRECTYANSWERSAverageYage
TheYpremiumYforYaYModifiedYwholeYlifeYpolicyYisY-
YCORRECTYANSWERSlowerYthanYtheYtypicalYwholeYlifeYpolicyYduringYtheYfirstYfewYyearsYandYthenYhi
gherYthanYtypicalYforYtheYremainder
TheYtypeYofYmultipleYprotectionYcoverageYthatYpaysYonYtheYdeathYofYtheYlastYpersonYisYcalledYa(n)Y-
YCORRECTYANSWERSsurvivorshipYlifeYpolicy
TheYtypeYofYpolicyYwhichYpaysYonYtheYdeathYofYtheYlastYpersonYisYcalledY-
YCORRECTYANSWERSsurvivorshipYlife
AnYemployeeYunderYaYgroupYinsuranceYpolicyYhasYtheYrightYtoYnameYaYbeneficiaryYandYtheYrightYtoY
-YCORRECTYANSWERSconvertYtoYanYindividualYpolicyYinYtheYeventYofYemploymentYtermination
AYbusinessYwillYtypicallyYuseYwhichYtypeYofYlifeYinsuranceYtoYcoverYtheirYemployees?Y-
YCORRECTYANSWERSGroupYpolicy
WhatYdoesYtheYwordY"level"YinYLevelYTermYdescribe?Y-YCORRECTYANSWERSTheYfaceYamount
