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PSI LIFE EXAM ACTUAL PREP QUESTIONS AND
WELL REVISED ANSWERS - LATEST AND
COMPLETE UPDATE WITH VERIFIED
SOLUTIONS – ASSURES PASS
1. What kind of retirement plan can a 75-employee for profit corporation
establish? - ANSWER: Simple IRA
2. The taxable portion of a monthly income benefit paid during the annuity
phase from a nonqualified annuity is calculated using the - ANSWER: Exclusion
ratio
3. Unfair claims settlement methods and practices by an insurance company
include all of the following acts EXCEPT - ANSWER: failure to pay all claims
that are reported within 90 days after a loss occurs
4. The settlement option that allows proceeds to remain with the insurer and
the earnings to be paid to the beneficiary on a monthly basis is called - ANSWER:
Interest only
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5. Regulations on life insurance advertising apply to which of the following
insurance company materials? - ANSWER: A radio commercial
that promotes the benefits of a specific company's life insurance products
6. An insurance company may contest a life policy within a MAXIMUM of
how many years after the policy's effective date? - ANSWER: 2
7. All of the following factors are used in life insurance premium determination
EXCEPT - ANSWER: Morbidity
8. The authorization used to obtain the applicant's medical information that will
be used by the insurer for the primary purpose of determining eligibility must
include: - ANSWER: the time frame in which the insurer must release the
eligibility decision to the agent
9. An intermediary who omits information on an insurance application without
the applicant's knowledge and submits the application to the insurer may be guilty
of: - ANSWER: Misrepresentation
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10. Dividends are NOT subject to taxation because - ANSWER: Paying
dividends is equivalent to returning a premium
11. The XYZ Insurance Company cancels an intermediary's contract. XYZ
could be bound by the intermediary's later acts if it: - ANSWER: Continues to pay
the intermediary deferred commissions
12. Which of the following products is designed to pay benefits that can provide
a stream of retirement income to the purchaser? - ANSWER: tax-deferred growth
13. Which of the following guarantees that the annuitant CANNOT outlive their
benefits? - ANSWER: Guaranteed lifetime withdrawal benefit
14. Which of the following statements is CORRECT about an insured's failure
to report a claim in a timely manner based on the advice of an intermediary? -
ANSWER: It does not affect the insurance company's obligations
PSI LIFE EXAM ACTUAL PREP QUESTIONS AND
WELL REVISED ANSWERS - LATEST AND
COMPLETE UPDATE WITH VERIFIED
SOLUTIONS – ASSURES PASS
1. What kind of retirement plan can a 75-employee for profit corporation
establish? - ANSWER: Simple IRA
2. The taxable portion of a monthly income benefit paid during the annuity
phase from a nonqualified annuity is calculated using the - ANSWER: Exclusion
ratio
3. Unfair claims settlement methods and practices by an insurance company
include all of the following acts EXCEPT - ANSWER: failure to pay all claims
that are reported within 90 days after a loss occurs
4. The settlement option that allows proceeds to remain with the insurer and
the earnings to be paid to the beneficiary on a monthly basis is called - ANSWER:
Interest only
,2|Page
5. Regulations on life insurance advertising apply to which of the following
insurance company materials? - ANSWER: A radio commercial
that promotes the benefits of a specific company's life insurance products
6. An insurance company may contest a life policy within a MAXIMUM of
how many years after the policy's effective date? - ANSWER: 2
7. All of the following factors are used in life insurance premium determination
EXCEPT - ANSWER: Morbidity
8. The authorization used to obtain the applicant's medical information that will
be used by the insurer for the primary purpose of determining eligibility must
include: - ANSWER: the time frame in which the insurer must release the
eligibility decision to the agent
9. An intermediary who omits information on an insurance application without
the applicant's knowledge and submits the application to the insurer may be guilty
of: - ANSWER: Misrepresentation
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10. Dividends are NOT subject to taxation because - ANSWER: Paying
dividends is equivalent to returning a premium
11. The XYZ Insurance Company cancels an intermediary's contract. XYZ
could be bound by the intermediary's later acts if it: - ANSWER: Continues to pay
the intermediary deferred commissions
12. Which of the following products is designed to pay benefits that can provide
a stream of retirement income to the purchaser? - ANSWER: tax-deferred growth
13. Which of the following guarantees that the annuitant CANNOT outlive their
benefits? - ANSWER: Guaranteed lifetime withdrawal benefit
14. Which of the following statements is CORRECT about an insured's failure
to report a claim in a timely manner based on the advice of an intermediary? -
ANSWER: It does not affect the insurance company's obligations
