PSI LIFE FINAL EXAM 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔What kind of retirement plan can a 1,500 employee for-profit corporation establish? -
✔✔401(k)
✔✔Which of the following authorities is required to examine the business records of
domestic insurance companies and licensed rate-services organizations in Wisconsin? -
✔✔The Office of commissioner of insurance
✔✔Which of the following dividend options will increase the death benefit? -
✔✔Guaranteed insurability
✔✔Under a executive bonus plan, premiums paid by the employer are - ✔✔only tax
deductible when the bonus is an insurance plan
✔✔An intermediary should determine whether replacement is involved in a transaction
no later than when the - ✔✔Insurance company issues the policy
✔✔In Wisconsin the intermediary holding which of the following licenses is exempt from
continuing education requirements? - ✔✔credit insurance
✔✔Contributions made to a Roth IRA are - ✔✔Not tax deductible
✔✔Who can surrender an annuity during the accumulation period? - ✔✔the policyowner
✔✔An annuity that guarantees a given number of income payments, whether or not the
annuitant is alive to receive them, is referred to as - ✔✔a life annuity certain
✔✔Which term describes naming a contingent beneficiary as "all of my children"? -
✔✔Class designation
✔✔A contract in which the company would be legally obligated to perform is considered
- ✔✔conditional
✔✔Which type of insurance policy is characterized by premiums that are fully paid-up
within a stated period, after which no further premiums are REQUIRED? - ✔✔Limited
payment life insurance
✔✔What is it called when an insurer writes only insureds who have known risks ? -
✔✔Predictable loss
, ✔✔Disclosure requirements for the sale of annuities do NOT apply to - ✔✔Immediate
annuities
✔✔Sam had a $100,000 5-year, non-renewable level term life insurance policy with his
wife as the beneficiary. Sam dies 8 years after the inception date of the policy. How
much will be paid to Sam's wife? - ✔✔Nothing
✔✔One of the MAIN responsibilities of an underwriter is to protect the insurer against -
✔✔adverse selection
✔✔The purpose of a variable contract is to - ✔✔provide benefits that may change
according to the investment experience of any separate account
✔✔A common purpose for purchasing a fixed annuity is to - ✔✔provide future economic
security, as payments do not fluctuate
✔✔What is an insurer's liability when it is discovered after an insured dies that the
insured's age on the policy was misstated? - ✔✔the insurer must pay a prorated amount
of the policy based on the amount of insurance the insured's premiums would have
been if purchased at the correct age
✔✔An immediate annuity is designed to make its first benefit payment to the annuitant
typically - ✔✔one month from the annuity's purchase date
✔✔In a policy collaterally assigned, proceeds will be paid upon the death of an insured
to the - ✔✔Beneficiary only
✔✔Once an insurance company's liability on a claim is established, the company MUST
- ✔✔Settle the claim in good faith
✔✔Annuities purchased with a series of premium payments that vary year to year are
called - ✔✔Flexible premium deferred annuities
✔✔An insurance company is deemed to know any facts material to a risk in which of the
following situations? - ✔✔An intermediary learns of a material fact when delivering the
policy
✔✔An insured has a policy with a cash value of $1,500 and an outstanding loan of
$500. How much money will the insured receive under the cash surrender value option?
- ✔✔$1,500 or $1,000
✔✔An intermediary may receive a commission on business written on the
intermediary's own life ONLY if the intermediary - ✔✔Is a licensed life agent in
SOLUTIONS RATED A+
✔✔What kind of retirement plan can a 1,500 employee for-profit corporation establish? -
✔✔401(k)
✔✔Which of the following authorities is required to examine the business records of
domestic insurance companies and licensed rate-services organizations in Wisconsin? -
✔✔The Office of commissioner of insurance
✔✔Which of the following dividend options will increase the death benefit? -
✔✔Guaranteed insurability
✔✔Under a executive bonus plan, premiums paid by the employer are - ✔✔only tax
deductible when the bonus is an insurance plan
✔✔An intermediary should determine whether replacement is involved in a transaction
no later than when the - ✔✔Insurance company issues the policy
✔✔In Wisconsin the intermediary holding which of the following licenses is exempt from
continuing education requirements? - ✔✔credit insurance
✔✔Contributions made to a Roth IRA are - ✔✔Not tax deductible
✔✔Who can surrender an annuity during the accumulation period? - ✔✔the policyowner
✔✔An annuity that guarantees a given number of income payments, whether or not the
annuitant is alive to receive them, is referred to as - ✔✔a life annuity certain
✔✔Which term describes naming a contingent beneficiary as "all of my children"? -
✔✔Class designation
✔✔A contract in which the company would be legally obligated to perform is considered
- ✔✔conditional
✔✔Which type of insurance policy is characterized by premiums that are fully paid-up
within a stated period, after which no further premiums are REQUIRED? - ✔✔Limited
payment life insurance
✔✔What is it called when an insurer writes only insureds who have known risks ? -
✔✔Predictable loss
, ✔✔Disclosure requirements for the sale of annuities do NOT apply to - ✔✔Immediate
annuities
✔✔Sam had a $100,000 5-year, non-renewable level term life insurance policy with his
wife as the beneficiary. Sam dies 8 years after the inception date of the policy. How
much will be paid to Sam's wife? - ✔✔Nothing
✔✔One of the MAIN responsibilities of an underwriter is to protect the insurer against -
✔✔adverse selection
✔✔The purpose of a variable contract is to - ✔✔provide benefits that may change
according to the investment experience of any separate account
✔✔A common purpose for purchasing a fixed annuity is to - ✔✔provide future economic
security, as payments do not fluctuate
✔✔What is an insurer's liability when it is discovered after an insured dies that the
insured's age on the policy was misstated? - ✔✔the insurer must pay a prorated amount
of the policy based on the amount of insurance the insured's premiums would have
been if purchased at the correct age
✔✔An immediate annuity is designed to make its first benefit payment to the annuitant
typically - ✔✔one month from the annuity's purchase date
✔✔In a policy collaterally assigned, proceeds will be paid upon the death of an insured
to the - ✔✔Beneficiary only
✔✔Once an insurance company's liability on a claim is established, the company MUST
- ✔✔Settle the claim in good faith
✔✔Annuities purchased with a series of premium payments that vary year to year are
called - ✔✔Flexible premium deferred annuities
✔✔An insurance company is deemed to know any facts material to a risk in which of the
following situations? - ✔✔An intermediary learns of a material fact when delivering the
policy
✔✔An insured has a policy with a cash value of $1,500 and an outstanding loan of
$500. How much money will the insured receive under the cash surrender value option?
- ✔✔$1,500 or $1,000
✔✔An intermediary may receive a commission on business written on the
intermediary's own life ONLY if the intermediary - ✔✔Is a licensed life agent in
