PSI NY Life Series 17-55 Accident and Health Practice Exam 400 Questions and Answers 1 of 145 2026-03-24
PSI NY Life Series 17-55
Accident and Health
Practice Exam 400
Questions and Answers
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PSI - NY Life Series 17-55, Accident and
Health Practice Exam 400 Questions and
Answers
401k - Tax Sheltered Annuities
ANSWER ✔
A 401(k) plan is a tax-advantaged, defined-contribution retirement account
offered by many employers to their employees. It is named after a section of the
U.S. Internal Revenue Code. Workers can make contributions to their 401(k)
accounts through automatic payroll withholding, and their employers can match
some or all of those contributions. The investment earnings in a traditional 401(k)
plan are not taxed until the employee withdraws that money, typically after
retirement. In a Roth 401(k) plan, withdrawals can be tax-free.
A 401(k) plan is a company-sponsored retirement account that employees can
contribute to. Employers may also make matching contributions.
There are two basic types of 401(k)s—traditional and Roth—which differ primarily
in how they're taxed.
In a traditional 401(k), employee contributions reduce their income taxes for the
year they are made, but their withdrawals are taxed. With a Roth, employees
make contributions with post-tax income, but can make withdrawals tax-free.
457 Plan
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,PSI - NY Life Series 17-55, Accident and Health Practice Exam 400 Questions
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and Answers 2026-03-24
ANSWER ✔
Non-qualified, deferred compensation plan established by state and local
governments for tax-exempt government agencies and tax exempt employees.
While governmental 457 plans have special catch-up provisions for those age 50
or older, they enjoy an even greater contribution amount in the three years
before retirement. The catch-up provisions three years prior to retirement will
amount to double the normal amount for allowable maximum contributions. Until
withdrawn, 457 plan contributions and all earnings remain untaxed. The 457 plan
assets of tax-exempt employers are subject to the claims of the employer's
creditors, but those of plans sponsored by governmental entities are not. Plan
distributions may occur at retirement; on separation from employment; as the
result of an unforeseeable emergency; and at death. Distributions may be taken
as a lump sum, in annual installments, or as an annuity. In 2002 and later years,
proceeds from a governmental 457 plan may be transferred to an IRA or a new
employer's 401(k), 403(b) or 457 plan that accepts transfers from an old
employer's plan. On withdrawal from an IRA or from the new plan, the
distribution will be subject to immediate taxation at ordinary income tax rates.
a 10% excise tax is normally applied to an early withdrawal from an IRA according
to HIPAA, This tax will not be applied if the withdrawal is used for medical
expenses that exceed ____ of the individuals adjusted gross income
ANSWER
✔ 7.5%
A beneficiary has just received a claim payment for a life insurance policy which of
the following is TRUE regarding the federal income tax liability owed?
- A flat tax of 1-% is owed on all proceeds
Page 3 of 145 PSI - NY Life Series
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and Answers 2026-03-24
- Federal income tax is owed if proceeds exceed 250,000
- No federal income tax is owed on life insurance proceeds
- Tax liability owed depends on the type of life insurance policy - ANSWER ✔
A change in an insurance application requires - ANSWER ✔ an initial made by the
applicant
A client told an international lie to an insurer in order to receive a favorable
premium. This is an example of - ANSWER ✔ Fraud
A common exclusion with vision plans is
- Eyeglass frames
- The examination
- Contact Lenses
- Lasik surgery - ANSWER ✔ Lasik surgery
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT - ANSWER ✔ Medical underwriting exam
A disability elimination period is best described as
- Time deductible
- dollar deductible
- Eligibility period
- Probation period - ANSWER ✔ Time deductible
Page 4 of 145 PSI - NY Life Series
Page 417-55, Accident and Health Practice Exam 400 Questions and Answers.pdf
PSI NY Life Series 17-55
Accident and Health
Practice Exam 400
Questions and Answers
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Page 1 of 145 PSI NY Life Series 17-55 Accident and Health Practice Exam 400 Questions and Answers.pdf
,PSI - NY Life Series 17-55, Accident and Health Practice Exam 400 Questions
2 of 145
and Answers 2026-03-24
PSI - NY Life Series 17-55, Accident and
Health Practice Exam 400 Questions and
Answers
401k - Tax Sheltered Annuities
ANSWER ✔
A 401(k) plan is a tax-advantaged, defined-contribution retirement account
offered by many employers to their employees. It is named after a section of the
U.S. Internal Revenue Code. Workers can make contributions to their 401(k)
accounts through automatic payroll withholding, and their employers can match
some or all of those contributions. The investment earnings in a traditional 401(k)
plan are not taxed until the employee withdraws that money, typically after
retirement. In a Roth 401(k) plan, withdrawals can be tax-free.
A 401(k) plan is a company-sponsored retirement account that employees can
contribute to. Employers may also make matching contributions.
There are two basic types of 401(k)s—traditional and Roth—which differ primarily
in how they're taxed.
In a traditional 401(k), employee contributions reduce their income taxes for the
year they are made, but their withdrawals are taxed. With a Roth, employees
make contributions with post-tax income, but can make withdrawals tax-free.
457 Plan
Page 2 of 145 PSI - NY Life Series
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,PSI - NY Life Series 17-55, Accident and Health Practice Exam 400 Questions
3 of 145
and Answers 2026-03-24
ANSWER ✔
Non-qualified, deferred compensation plan established by state and local
governments for tax-exempt government agencies and tax exempt employees.
While governmental 457 plans have special catch-up provisions for those age 50
or older, they enjoy an even greater contribution amount in the three years
before retirement. The catch-up provisions three years prior to retirement will
amount to double the normal amount for allowable maximum contributions. Until
withdrawn, 457 plan contributions and all earnings remain untaxed. The 457 plan
assets of tax-exempt employers are subject to the claims of the employer's
creditors, but those of plans sponsored by governmental entities are not. Plan
distributions may occur at retirement; on separation from employment; as the
result of an unforeseeable emergency; and at death. Distributions may be taken
as a lump sum, in annual installments, or as an annuity. In 2002 and later years,
proceeds from a governmental 457 plan may be transferred to an IRA or a new
employer's 401(k), 403(b) or 457 plan that accepts transfers from an old
employer's plan. On withdrawal from an IRA or from the new plan, the
distribution will be subject to immediate taxation at ordinary income tax rates.
a 10% excise tax is normally applied to an early withdrawal from an IRA according
to HIPAA, This tax will not be applied if the withdrawal is used for medical
expenses that exceed ____ of the individuals adjusted gross income
ANSWER
✔ 7.5%
A beneficiary has just received a claim payment for a life insurance policy which of
the following is TRUE regarding the federal income tax liability owed?
- A flat tax of 1-% is owed on all proceeds
Page 3 of 145 PSI - NY Life Series
Page 317-55, Accident and Health Practice Exam 400 Questions and Answers.pdf
, PSI - NY Life Series 17-55, Accident and Health Practice Exam 400 Questions
4 of 145
and Answers 2026-03-24
- Federal income tax is owed if proceeds exceed 250,000
- No federal income tax is owed on life insurance proceeds
- Tax liability owed depends on the type of life insurance policy - ANSWER ✔
A change in an insurance application requires - ANSWER ✔ an initial made by the
applicant
A client told an international lie to an insurer in order to receive a favorable
premium. This is an example of - ANSWER ✔ Fraud
A common exclusion with vision plans is
- Eyeglass frames
- The examination
- Contact Lenses
- Lasik surgery - ANSWER ✔ Lasik surgery
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT - ANSWER ✔ Medical underwriting exam
A disability elimination period is best described as
- Time deductible
- dollar deductible
- Eligibility period
- Probation period - ANSWER ✔ Time deductible
Page 4 of 145 PSI - NY Life Series
Page 417-55, Accident and Health Practice Exam 400 Questions and Answers.pdf
