PSI Life Exam
A common purpose for purchasing a fixed annuity is to - ANS -provide future economic security,
as payments do not fluctuate
\A contract in which the company would be legally obligated to perform is considered - ANS
-conditional
\A payor benefit rider would be found on which type of policy? - ANS -A juvenile life policy
\A person who intentionally commits a criminal violation of an insurance law may be subject to a
MAXIMUM fine of - ANS -$5,000
\A policy may contain provisions excluding or restricting coverage as specified in the event of
death under all of the following except - ANS -a fare-paying passenger traveling via commercial
transport
\A policy summary MUST contain the - ANS -date on which the policy summary is prepared
\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? - ANS -a nonforfeiture clause
\All of the following factors are used in life insurance premium determination EXCEPT - ANS
-Morbidity
\All of the following statements regarding a group annuity are correct EXCEPT - ANS -Each
employee signs and receives an individual contract
\An accelerated death benefit - ANS -Pays a portion of the face amount when a policyowner is
determined to be terminally ill
\An annuity that guarantees a given number of income payments, whether or not the annuitant
is alive to receive them, is referred to as - ANS -a life annuity certain
\An annuity where the policyowner chooses a pre-determined number of benefit payments is
referred to as - ANS -Period Certain
\An applicant would be charged a higher premium for a life insurance policy if they were - ANS
-Older
\An example of a risk that is NOT a pure risk would be - ANS -injury in an accident
\An immediate annuity begins making payments after the - ANS -first premium has been paid
\An immediate annuity is designed to make its first benefit payment to the annuitant typically -
ANS -one month from the annuity's purchase date
\An important goal of the Interstate Insurance Product Regulation Compact is to - ANS -Provide
insurers a single point of filling for review and approval of certain policy forms
\An individual who is NOT acceptable by an insurer at standard rates because of health, habits,
or occupation is called a - ANS -Substandard Risk
\An insurance company is deemed to know any facts material to a risk in which of the following
situations? - ANS -An intermediary learns of a material fact when delivering the policy
\An insurance company may contest a life policy within a MAXIMUM of how many years after
the policy's effective date? - ANS -2
\An insurance policy is a contract of utmost good faith because the insurer relies on the
truthfulness of the applicant and the insured relies on the insurer's promise to - ANS -Pay claims
, \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? - ANS -$1,500 or
$1,000
\An insurer may cancel a policy midterm for all of the following reasons EXCEPT when the
insured: - ANS -Has a change in marital status
\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: - ANS -Twisting
\An intermediary may receive a commission on business written on the intermediary's own life
ONLY if the intermediary - ANS -Is a licensed life agent in Wisconsin and has sold insurance
with the same company during the prior year with total premiums exceeding the premium on the
intermediary's own life
\An intermediary should determine whether replacement is involved in a transaction no later
than when the - ANS -Insurance company issues the policy
\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: - ANS -Misrepresentation
\An life insurance policy is required to contain which of the following provisions? - ANS -A
reinstatement provision during which the interest may be charge for late payments
\Annuities purchased with a series of premium payments that vary year to year are called - ANS
-Flexible premium deferred annuities
\Any form that becomes part of an insurance contract must be filed at the Office of the
Commissioner of Insurance - ANS -Prior to its use
\As a form of level premium permanent insurance, ordinary life insurance accumulates a reserve
that eventually - ANS -equals the face amount of the policy
\Backdating on a life insurance policy is the practice of - ANS -Making the policy effective on an
earlier date then the present
\Contributions made to a Roth IRA are - ANS -Not tax deductible
\Disclosure requirements for the sale of annuities do NOT apply to - ANS -Immediate annuities
\Dividends are NOT subject to taxation because - ANS -Paying dividends is equivalent to
returning a premium
\Events or conditions the increase the likelihood of an insured's loss are referred to as - ANS
-hazards
\Generally, all of the following apply to group life insurance EXCEPT - ANS -evidence of
insurability is not required
\Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date
the - ANS -policy is delivered and accepted
\How many days does a terminated employee have to covert to his group life insurance policy to
an individual policy? - ANS -31
\If an annuitant is making premium payments on a periodic basis, which type of annuity have
they purchased? - ANS -Deferred
\If an insurer determines the insured is totally disabled, the policyowner is relieved of paying the
policy premiums as long as the disability continues. The statement describes the - ANS -waiver
of premium rider
A common purpose for purchasing a fixed annuity is to - ANS -provide future economic security,
as payments do not fluctuate
\A contract in which the company would be legally obligated to perform is considered - ANS
-conditional
\A payor benefit rider would be found on which type of policy? - ANS -A juvenile life policy
\A person who intentionally commits a criminal violation of an insurance law may be subject to a
MAXIMUM fine of - ANS -$5,000
\A policy may contain provisions excluding or restricting coverage as specified in the event of
death under all of the following except - ANS -a fare-paying passenger traveling via commercial
transport
\A policy summary MUST contain the - ANS -date on which the policy summary is prepared
\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? - ANS -a nonforfeiture clause
\All of the following factors are used in life insurance premium determination EXCEPT - ANS
-Morbidity
\All of the following statements regarding a group annuity are correct EXCEPT - ANS -Each
employee signs and receives an individual contract
\An accelerated death benefit - ANS -Pays a portion of the face amount when a policyowner is
determined to be terminally ill
\An annuity that guarantees a given number of income payments, whether or not the annuitant
is alive to receive them, is referred to as - ANS -a life annuity certain
\An annuity where the policyowner chooses a pre-determined number of benefit payments is
referred to as - ANS -Period Certain
\An applicant would be charged a higher premium for a life insurance policy if they were - ANS
-Older
\An example of a risk that is NOT a pure risk would be - ANS -injury in an accident
\An immediate annuity begins making payments after the - ANS -first premium has been paid
\An immediate annuity is designed to make its first benefit payment to the annuitant typically -
ANS -one month from the annuity's purchase date
\An important goal of the Interstate Insurance Product Regulation Compact is to - ANS -Provide
insurers a single point of filling for review and approval of certain policy forms
\An individual who is NOT acceptable by an insurer at standard rates because of health, habits,
or occupation is called a - ANS -Substandard Risk
\An insurance company is deemed to know any facts material to a risk in which of the following
situations? - ANS -An intermediary learns of a material fact when delivering the policy
\An insurance company may contest a life policy within a MAXIMUM of how many years after
the policy's effective date? - ANS -2
\An insurance policy is a contract of utmost good faith because the insurer relies on the
truthfulness of the applicant and the insured relies on the insurer's promise to - ANS -Pay claims
, \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? - ANS -$1,500 or
$1,000
\An insurer may cancel a policy midterm for all of the following reasons EXCEPT when the
insured: - ANS -Has a change in marital status
\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: - ANS -Twisting
\An intermediary may receive a commission on business written on the intermediary's own life
ONLY if the intermediary - ANS -Is a licensed life agent in Wisconsin and has sold insurance
with the same company during the prior year with total premiums exceeding the premium on the
intermediary's own life
\An intermediary should determine whether replacement is involved in a transaction no later
than when the - ANS -Insurance company issues the policy
\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: - ANS -Misrepresentation
\An life insurance policy is required to contain which of the following provisions? - ANS -A
reinstatement provision during which the interest may be charge for late payments
\Annuities purchased with a series of premium payments that vary year to year are called - ANS
-Flexible premium deferred annuities
\Any form that becomes part of an insurance contract must be filed at the Office of the
Commissioner of Insurance - ANS -Prior to its use
\As a form of level premium permanent insurance, ordinary life insurance accumulates a reserve
that eventually - ANS -equals the face amount of the policy
\Backdating on a life insurance policy is the practice of - ANS -Making the policy effective on an
earlier date then the present
\Contributions made to a Roth IRA are - ANS -Not tax deductible
\Disclosure requirements for the sale of annuities do NOT apply to - ANS -Immediate annuities
\Dividends are NOT subject to taxation because - ANS -Paying dividends is equivalent to
returning a premium
\Events or conditions the increase the likelihood of an insured's loss are referred to as - ANS
-hazards
\Generally, all of the following apply to group life insurance EXCEPT - ANS -evidence of
insurability is not required
\Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date
the - ANS -policy is delivered and accepted
\How many days does a terminated employee have to covert to his group life insurance policy to
an individual policy? - ANS -31
\If an annuitant is making premium payments on a periodic basis, which type of annuity have
they purchased? - ANS -Deferred
\If an insurer determines the insured is totally disabled, the policyowner is relieved of paying the
policy premiums as long as the disability continues. The statement describes the - ANS -waiver
of premium rider
