PSI LIFE EXAM SCRIPT 2026/2027 QUESTIONS AND
SOLUTIONS RATED A+
✔✔the life insurance illustration rule applies to: - ✔✔Universal Life
✔✔Which of the following is NOT subject to the Wisconsin annuity suitability law? -
✔✔Fixed settlement options
✔✔Without written consent, a policyowner CANNOT change the beneficiary if he has
named - ✔✔An irrevocable beneficiary
✔✔What element of a contract does the application represent? - ✔✔Offer
✔✔An life insurance policy is required to contain which of the following provisions? -
✔✔A reinstatement provision during which the interest may be charge for late payments
✔✔In which of the following fixed annuity features is the surrender value tied to interest
rates? - ✔✔Market value adjustments
✔✔Which of the following policies allows for partial surrender? - ✔✔Universal Life
✔✔Any form that becomes part of an insurance contract must be filed at the Office of
the Commissioner of Insurance - ✔✔Prior to its use
✔✔Keogh (HR 10) plans were designed to provide retirement benefits for - ✔✔Self-
employed individuals
✔✔Which statements is NOT a characteristic of Group Life insurance plan? -
✔✔Individual underwriting
✔✔Insurance applications with an AVERAGE life expectancy without higher than
normal risk factors are considered which type of risk? - ✔✔Standard
✔✔Which of the following dividend options is taxable? - ✔✔Accumulation at interest
✔✔Which nonforfeiture option allows the policyowner to purchase less coverage for
life? - ✔✔Reduced Paid-Up Insurance
✔✔Who is allowed to make changes to a life insurance contact terms? - ✔✔An officer of
the company
✔✔Which of the following policies allows the policyowner to change two policy
features? - ✔✔Adjustable Life
, ✔✔Which of the following provides a death benefit if the spouse of the insured dies? -
✔✔Family term insurance rider
✔✔Which of the following states BEST describes a single premium cash value policy? -
✔✔It provides for only one premium to be paid without evidence of insurability
✔✔Universal life and variable life insurance policies contain many similar features.
Which of the following features is unique to variable universal life insurance? - ✔✔It
includes the right to select the investment which will provide the greatest return
✔✔Which of the following is a potential DISADVANTAGE of a fixed annuity? -
✔✔Annuitants could experience a decrease in the purchasing power of their payments
over a period of years due to inflation
✔✔A premium is due on a life insurance policy the first of each month. The policyowner
failed to pay the premium and 20 days later the insured died. Under which of the
following provisions would the death benefit be paid? - ✔✔a nonforfeiture clause
✔✔The period after an annuity is purchased but before distributions begin is referred to
as the - ✔✔accumulation phase
✔✔In order to ensure compliance with the law, the Insurance Commissioner may issue
- ✔✔orders
✔✔As a form of level premium permanent insurance, ordinary life insurance
accumulates a reserve that eventually - ✔✔equals the face amount of the policy
✔✔An intermediary is employed by an insurance agency affiliated with a lending
institution. As a condition for a loan, the institution requires placement of insurance on
the applicant's life with the affiliated agency. In this situation the institution's action is
referred to as: - ✔✔Twisting
✔✔If Term Life is renewable, the policyowner is purchasing the right to renew the policy
- ✔✔without showing proof of insurability
✔✔An important goal of the Interstate Insurance Product Regulation Compact is to -
✔✔Provide insurers a single point of filling for review and approval of certain policy
forms
✔✔Events or conditions the increase the likelihood of an insured's loss are referred to
as - ✔✔hazards
SOLUTIONS RATED A+
✔✔the life insurance illustration rule applies to: - ✔✔Universal Life
✔✔Which of the following is NOT subject to the Wisconsin annuity suitability law? -
✔✔Fixed settlement options
✔✔Without written consent, a policyowner CANNOT change the beneficiary if he has
named - ✔✔An irrevocable beneficiary
✔✔What element of a contract does the application represent? - ✔✔Offer
✔✔An life insurance policy is required to contain which of the following provisions? -
✔✔A reinstatement provision during which the interest may be charge for late payments
✔✔In which of the following fixed annuity features is the surrender value tied to interest
rates? - ✔✔Market value adjustments
✔✔Which of the following policies allows for partial surrender? - ✔✔Universal Life
✔✔Any form that becomes part of an insurance contract must be filed at the Office of
the Commissioner of Insurance - ✔✔Prior to its use
✔✔Keogh (HR 10) plans were designed to provide retirement benefits for - ✔✔Self-
employed individuals
✔✔Which statements is NOT a characteristic of Group Life insurance plan? -
✔✔Individual underwriting
✔✔Insurance applications with an AVERAGE life expectancy without higher than
normal risk factors are considered which type of risk? - ✔✔Standard
✔✔Which of the following dividend options is taxable? - ✔✔Accumulation at interest
✔✔Which nonforfeiture option allows the policyowner to purchase less coverage for
life? - ✔✔Reduced Paid-Up Insurance
✔✔Who is allowed to make changes to a life insurance contact terms? - ✔✔An officer of
the company
✔✔Which of the following policies allows the policyowner to change two policy
features? - ✔✔Adjustable Life
, ✔✔Which of the following provides a death benefit if the spouse of the insured dies? -
✔✔Family term insurance rider
✔✔Which of the following states BEST describes a single premium cash value policy? -
✔✔It provides for only one premium to be paid without evidence of insurability
✔✔Universal life and variable life insurance policies contain many similar features.
Which of the following features is unique to variable universal life insurance? - ✔✔It
includes the right to select the investment which will provide the greatest return
✔✔Which of the following is a potential DISADVANTAGE of a fixed annuity? -
✔✔Annuitants could experience a decrease in the purchasing power of their payments
over a period of years due to inflation
✔✔A premium is due on a life insurance policy the first of each month. The policyowner
failed to pay the premium and 20 days later the insured died. Under which of the
following provisions would the death benefit be paid? - ✔✔a nonforfeiture clause
✔✔The period after an annuity is purchased but before distributions begin is referred to
as the - ✔✔accumulation phase
✔✔In order to ensure compliance with the law, the Insurance Commissioner may issue
- ✔✔orders
✔✔As a form of level premium permanent insurance, ordinary life insurance
accumulates a reserve that eventually - ✔✔equals the face amount of the policy
✔✔An intermediary is employed by an insurance agency affiliated with a lending
institution. As a condition for a loan, the institution requires placement of insurance on
the applicant's life with the affiliated agency. In this situation the institution's action is
referred to as: - ✔✔Twisting
✔✔If Term Life is renewable, the policyowner is purchasing the right to renew the policy
- ✔✔without showing proof of insurability
✔✔An important goal of the Interstate Insurance Product Regulation Compact is to -
✔✔Provide insurers a single point of filling for review and approval of certain policy
forms
✔✔Events or conditions the increase the likelihood of an insured's loss are referred to
as - ✔✔hazards
