PSI LIFE ACCIDENT AND HEALTH STUDY GUIDE EXAM
2026/2027 QUESTIONS AND SOLUTIONS RATED A+
✔✔Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility?
A. accelerated benefits rider
B. assisted living rider
C. terminal illness rider
D. long term care rider - ✔✔long term care rider
✔✔All of the following are characteristics of COBRA EXCEPT
A. qualifying events.
B. notification statements.
C. continuation of coverage.
D. change in medical privacy procedures. - ✔✔change in medical privacy procedures.
✔✔What type of insurance should a company purchase if it wants to insure the life of its
CEO?
A. key person insurance
B. BOE insurance
C. group life policy
D. industrial life insurance - ✔✔key person insurance
✔✔Which of the following is true about a decreasing term life policy?
A. The cash value of the policy decreases over time.
B. The face amount reaches zero at policy expiration.
C. Premiums decrease over time but the amount of coverage remains constant.
D. Commonly sold as a rider to another type of policy to provide an additional death
benefit. - ✔✔The face amount reaches zero at policy expiration.
✔✔For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following?
A. Age
B. Cost of care
C. Policy value
D. Premium cost - ✔✔Age
✔✔Which of the following must be given to the insurer within 20 days after occurrence
or commencement of any loss covered by the policy, or as soon thereafter as is
reasonably possible?
A. evidence of insurability
B. notice of claim
C. proof of loss
D. supporting evidence for the claim - ✔✔notice of claim
, ✔✔Managed care plans increase efficiency by all of the following means EXCEPT
A. increasing beneficiary cost sharing.
B. controlling inpatient admissions and length of stay.
C. selectively contracting with health care providers.
D. transferring the management of costs to the insureds. - ✔✔transferring the
management of costs to the insureds.
✔✔Which of the following is an example of a premium payment mode?
A. annual premium payment
B. payment by check
C. automatic deduction of premium
D. $200 per policy year - ✔✔annual premium payment
✔✔What is the waiver of premium provision?
A. In a long term care contract, the premium is waived after the insured has been
confined for a specific period of time.
B. In a life insurance policy, the insured may request a waiver of premium during times
of financial hardship.
C. In a disability policy, the premium is waived after the insurance benefit period has
been passed
D. In a health insurance policy, the premium is waived after the maximum out of pocket
has been paid by the insured. - ✔✔In a long term care contract, the premium is waived
after the insured has been confined for a specific period of time.
✔✔Which of the following amends the Social Security Act to make Medicare secondary
to group health plans?
A. ADEA
B. ERISA
C. OBRA
D. TEFRA - ✔✔TEFRA
✔✔When will a policy pay on a UCR (Usual, Customary, Reasonable) basis?
A. When particular benefits are not listed on a payment schedule
B. When a surgical procedure is not pre-approved by the insurer
C. When the provider charges a different amount than is listed on the payment schedule
D. When the treatment is received in a different geographic area than where the insured
lives - ✔✔When particular benefits are not listed on a payment schedule
✔✔Which one of the following represents an advantage of obtaining a policy loan
versus a withdrawal?
A. the loan is subtracted from the death benefit and does not require payments
B. the loan is not taxed while a withdrawal is taxed for amounts above the contract cost
basis
2026/2027 QUESTIONS AND SOLUTIONS RATED A+
✔✔Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility?
A. accelerated benefits rider
B. assisted living rider
C. terminal illness rider
D. long term care rider - ✔✔long term care rider
✔✔All of the following are characteristics of COBRA EXCEPT
A. qualifying events.
B. notification statements.
C. continuation of coverage.
D. change in medical privacy procedures. - ✔✔change in medical privacy procedures.
✔✔What type of insurance should a company purchase if it wants to insure the life of its
CEO?
A. key person insurance
B. BOE insurance
C. group life policy
D. industrial life insurance - ✔✔key person insurance
✔✔Which of the following is true about a decreasing term life policy?
A. The cash value of the policy decreases over time.
B. The face amount reaches zero at policy expiration.
C. Premiums decrease over time but the amount of coverage remains constant.
D. Commonly sold as a rider to another type of policy to provide an additional death
benefit. - ✔✔The face amount reaches zero at policy expiration.
✔✔For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following?
A. Age
B. Cost of care
C. Policy value
D. Premium cost - ✔✔Age
✔✔Which of the following must be given to the insurer within 20 days after occurrence
or commencement of any loss covered by the policy, or as soon thereafter as is
reasonably possible?
A. evidence of insurability
B. notice of claim
C. proof of loss
D. supporting evidence for the claim - ✔✔notice of claim
, ✔✔Managed care plans increase efficiency by all of the following means EXCEPT
A. increasing beneficiary cost sharing.
B. controlling inpatient admissions and length of stay.
C. selectively contracting with health care providers.
D. transferring the management of costs to the insureds. - ✔✔transferring the
management of costs to the insureds.
✔✔Which of the following is an example of a premium payment mode?
A. annual premium payment
B. payment by check
C. automatic deduction of premium
D. $200 per policy year - ✔✔annual premium payment
✔✔What is the waiver of premium provision?
A. In a long term care contract, the premium is waived after the insured has been
confined for a specific period of time.
B. In a life insurance policy, the insured may request a waiver of premium during times
of financial hardship.
C. In a disability policy, the premium is waived after the insurance benefit period has
been passed
D. In a health insurance policy, the premium is waived after the maximum out of pocket
has been paid by the insured. - ✔✔In a long term care contract, the premium is waived
after the insured has been confined for a specific period of time.
✔✔Which of the following amends the Social Security Act to make Medicare secondary
to group health plans?
A. ADEA
B. ERISA
C. OBRA
D. TEFRA - ✔✔TEFRA
✔✔When will a policy pay on a UCR (Usual, Customary, Reasonable) basis?
A. When particular benefits are not listed on a payment schedule
B. When a surgical procedure is not pre-approved by the insurer
C. When the provider charges a different amount than is listed on the payment schedule
D. When the treatment is received in a different geographic area than where the insured
lives - ✔✔When particular benefits are not listed on a payment schedule
✔✔Which one of the following represents an advantage of obtaining a policy loan
versus a withdrawal?
A. the loan is subtracted from the death benefit and does not require payments
B. the loan is not taxed while a withdrawal is taxed for amounts above the contract cost
basis
