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PSI Life Insurance Exam with 100% Correct Answers

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  • February 20, 2025
  • 28
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  • Exam (elaborations)
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PSI Life Insurance Exam with 100% Correct Answers

1. What is it called when a life insurance policy pays a multiple of the coverage amount when
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certain types of accidents occur?: multiple indemnity
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2. Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER
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the time granted by the insurer, what is the maximum amount of time for reinstatement of t
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he policy?: 30 days
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3. Which of the following statements regarding a pure life annuity payout option is corr
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ect?: This option provides the highest monthly income.
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4. Which of the following does not apply to the time limit on certain defenses provision in h
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ealth insurance policies?: fraudulent misstatements
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5. If an individual is insured by both their own health insurance policy and their spouse's p
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olicy, which policy pays first in the event of an illness?: The individual's policy pays first, the s
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pouse's policy pays the remaining up to coverage amount.
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6. When can the premiums of an individually owned health insurance policy be deducted fro
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m the individual's income tax?: when the taxpayer's unreimbursed medical expenses exceed
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7.5% of adjusted gross income during a taxable year
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7. When the suicide clause is inserted in a life insurance contract, death by suicide is not
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covered during the policy's initial: 2 year period.
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8. Which of the following is a characteristic of Health Maintenance Organiza-
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tions (HMOs)?: preventive care
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9. The life insurance policy will not be truly effective until all of the following occur EXCEP
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T: the producer has explained the policy to the client.
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10. Under which situation must insurable interest exist between the applicant and insured
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at the time of application?: when a third-party applicant names themselves beneficiary
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11. Which of the following is a distinguishing feature of a variable life in-
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surance policy?: The cash value earnings are based on the performance of the separate acc
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ount.
12. The person who receives the benefit of an annuity is known as the: annui- tant.
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13. Which of the following is an example of a premium payment mode?: annual premium pay
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,ment
14. How do most disability policies handle the case of a recurrent disability occurring at l
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east 90 days after the first claim?: it must be handled as a new claim for a new period of disa
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bility, requiring a new elimination period.
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15. Which of the following is true for most comprehensive dental policies?: -
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Routine care is provided without coinsurance or deductibles.
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, 16. Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded aft
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er how many months from the effective date of the policy?: 6 months
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17. What does an application for insurance contractually represent for the insured?: a
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n offer z



18. Which of the following is exempted from the incontestability provision in insurance po
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licies?: fraudulent misstatements z z



19. Which of the following may be thought of as a time deductible rather than a dollar dedu
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ctible in a disability income policy because benefits are not payable during that time?: elim
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ination period z



20. How long after being entitled to Social Security disability benefits will an individual be
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eligible to receive Medicare benefits?: 2 years z z z z z z



21. If a policy is determined to be a Modified Endowment Contract (MEC), funds receiv
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ed under the policy will be: considered taxable income first.
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22. Which type of annuity attempts to offset inflation by providing a benefit linked to an u
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nderlying investment account?: variable z z z



23. What is a MIB report?: medical information on an applicant for assessing life or health ins
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urance risk z



24. Group Life Policies typically include which of the following provisions?: -
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conversion privilege z



25. In a case where an individual's health is insured by both their own policy and their spou
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se's policy, which policy pays in the event of an illness?: The individual's policy pays first, the
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spouse's policy pays the remaining up to coverage amount. z z z z z z z z



26. The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is
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zknown as: exclusion. z z



27. The primary purpose of Health Reimbursement Accounts (HRAs) is to as-
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zsist: covered employees with the payment of medical expenses on a high deductible plan funded
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through pre-tax contributions. z z



28. What type of insurance should a company purchase if it wants to insure the life of its
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CEO?: key person insurance z z z



29. Which is the major reason why long term care insurance is becoming increasingly i
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mportant?: As life expectancy increases, the chances of needing long term care also increa
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