PSI LIFE ACCIDENT AND HEALTH EXAM SCRIPT 2025/2026
QUESTIONS WITH ANSWERS GRADED A+
✔✔Optionally Renewable Policies - ✔✔Give the insurer the option to terminate the
policy on a date specified in the contract. If the insurer decides to renew (not cancel) the
policy, they also have the option (and usually choose to) increase the premiums on the
anniversary date.
✔✔Conditionally Renewable Policies - ✔✔A conditionally renewable policy allows an
insurer to terminate the coverage but only in the event of one or more conditions stated
in the contract. They typically are related to the insured reaching a certain age or losing
gainful employment.
✔✔Guaranteed Renewable Policies - ✔✔The renewal provision in a guaranteed
renewable policy specifies that the policy MUST be renewed (as long as premiums are
paid) until the insured reaches a specified age, such as 60 or 65. The insurer still has
the option (and usually chooses to) increase the premiums on the anniversary date.
Medicare supplement policies and long term care policies are the most common types
of guaranteed renewable policies.
✔✔Noncancellabe Policies - ✔✔State the policy cannot be cancelled nor can it's
premium rates be increased under any circumstances. Disability policies are the most
common noncancellable (noncan) policies.
✔✔Nonrenewable Policies - ✔✔Are for stablished policy lengths of a year or less
(typically short-term health insurance) and are considered temporary.
✔✔Cafeteria Plans - ✔✔Also called Section 125 plans. Employee benefits are paid for
on a pretax basis, which amounts for valuable savings.
✔✔Business Continuation Plans - ✔✔Provide a way to help a business continue in the
event an owner or key employee dies, or in the event of a disabling sickness or injury.
✔✔Business Overhead Expense Insurance - ✔✔A form of disability income coverage
designed to pay necessary business overhead expenses, such as rent, should the
insured business owner become disabled. Does not include any compensation for the
disabled owner.
✔✔Disability Buy-Sell Plans (Disability Buy Out Agreement) - ✔✔Plan sets forth the
terms for selling and buying a partners or stock owners share of business in the event of
disability and is no longer able to participate in the business.
✔✔Key Person Disability Insurance - ✔✔Pays a monthly benefit to a business to cover
expenses for additional help or outside services when an essential person is disabled.
, ✔✔Noncontributory Plan - ✔✔Employee benefit plan under which the employer bears
the full cost of the employees' benefits; must insure 100% of eligible employees.
✔✔Contributory Plan - ✔✔Group insurance plan under which the employees contribute
to the payment of premiums. 75% of eligible employees must be insured in most states.
✔✔Coordination of Benefits (COB) - ✔✔A clause in an insurance policy that explains
how the policy will pay if more than one insurance policy applies to the claim.
✔✔Enrollment Period - ✔✔Period during which new employees can sign up for
coverage under a group insurance plan.
✔✔Enrollment Card - ✔✔Must be completed and signed by a new employee during the
open enrollment period to enroll in group insurance.
✔✔Waiting Period - ✔✔A period of time (usually 12 months) when you are not covered
by insurance for a pre-existing conditions.
✔✔Probationary Period - ✔✔Specified number of days after an insurance policy's issue
date during which coverage is not afforded for sickness. Standard practice for group
coverages.
✔✔Health Insurance Portability and Accountability Act (HIPAA) - ✔✔Federal legislation
passed in 1996. Its main effect in EMS is in limiting availability of patients' health care
information and penalizing violations of patient privacy.
✔✔Conversion Privilege - ✔✔Allows the policy owner, before an original insurance
policy expires, to elect to have a new policy issued that will continue the insurance
coverage. Conversion may be effected at attained age (premiums based on the age
attained at time of conversion) or at original age (premiums based on age at time of
original issue).
✔✔Pre-Existing Conditions - ✔✔Conditions for which the insured has received
diagnosis, advice, care, or treatment during a specific time period prior to the application
for health coverage that is usually excluded from coverage.
✔✔Creditable Coverage - ✔✔Prior healthcare coverage that is taken into account to
determine the allowable length of preexisting condition exclusion periods (for individuals
entering group health plan coverage).
✔✔Consolidated Omnibus Budget Reconciliation Act (COBRA) - ✔✔Federal law that
requires employers to permit employees or their dependents to extend their health
insurance coverage at group rates for up to 36 months following a qualifying event, such
as a layoff, reduction in hours, or the employee's death.
QUESTIONS WITH ANSWERS GRADED A+
✔✔Optionally Renewable Policies - ✔✔Give the insurer the option to terminate the
policy on a date specified in the contract. If the insurer decides to renew (not cancel) the
policy, they also have the option (and usually choose to) increase the premiums on the
anniversary date.
✔✔Conditionally Renewable Policies - ✔✔A conditionally renewable policy allows an
insurer to terminate the coverage but only in the event of one or more conditions stated
in the contract. They typically are related to the insured reaching a certain age or losing
gainful employment.
✔✔Guaranteed Renewable Policies - ✔✔The renewal provision in a guaranteed
renewable policy specifies that the policy MUST be renewed (as long as premiums are
paid) until the insured reaches a specified age, such as 60 or 65. The insurer still has
the option (and usually chooses to) increase the premiums on the anniversary date.
Medicare supplement policies and long term care policies are the most common types
of guaranteed renewable policies.
✔✔Noncancellabe Policies - ✔✔State the policy cannot be cancelled nor can it's
premium rates be increased under any circumstances. Disability policies are the most
common noncancellable (noncan) policies.
✔✔Nonrenewable Policies - ✔✔Are for stablished policy lengths of a year or less
(typically short-term health insurance) and are considered temporary.
✔✔Cafeteria Plans - ✔✔Also called Section 125 plans. Employee benefits are paid for
on a pretax basis, which amounts for valuable savings.
✔✔Business Continuation Plans - ✔✔Provide a way to help a business continue in the
event an owner or key employee dies, or in the event of a disabling sickness or injury.
✔✔Business Overhead Expense Insurance - ✔✔A form of disability income coverage
designed to pay necessary business overhead expenses, such as rent, should the
insured business owner become disabled. Does not include any compensation for the
disabled owner.
✔✔Disability Buy-Sell Plans (Disability Buy Out Agreement) - ✔✔Plan sets forth the
terms for selling and buying a partners or stock owners share of business in the event of
disability and is no longer able to participate in the business.
✔✔Key Person Disability Insurance - ✔✔Pays a monthly benefit to a business to cover
expenses for additional help or outside services when an essential person is disabled.
, ✔✔Noncontributory Plan - ✔✔Employee benefit plan under which the employer bears
the full cost of the employees' benefits; must insure 100% of eligible employees.
✔✔Contributory Plan - ✔✔Group insurance plan under which the employees contribute
to the payment of premiums. 75% of eligible employees must be insured in most states.
✔✔Coordination of Benefits (COB) - ✔✔A clause in an insurance policy that explains
how the policy will pay if more than one insurance policy applies to the claim.
✔✔Enrollment Period - ✔✔Period during which new employees can sign up for
coverage under a group insurance plan.
✔✔Enrollment Card - ✔✔Must be completed and signed by a new employee during the
open enrollment period to enroll in group insurance.
✔✔Waiting Period - ✔✔A period of time (usually 12 months) when you are not covered
by insurance for a pre-existing conditions.
✔✔Probationary Period - ✔✔Specified number of days after an insurance policy's issue
date during which coverage is not afforded for sickness. Standard practice for group
coverages.
✔✔Health Insurance Portability and Accountability Act (HIPAA) - ✔✔Federal legislation
passed in 1996. Its main effect in EMS is in limiting availability of patients' health care
information and penalizing violations of patient privacy.
✔✔Conversion Privilege - ✔✔Allows the policy owner, before an original insurance
policy expires, to elect to have a new policy issued that will continue the insurance
coverage. Conversion may be effected at attained age (premiums based on the age
attained at time of conversion) or at original age (premiums based on age at time of
original issue).
✔✔Pre-Existing Conditions - ✔✔Conditions for which the insured has received
diagnosis, advice, care, or treatment during a specific time period prior to the application
for health coverage that is usually excluded from coverage.
✔✔Creditable Coverage - ✔✔Prior healthcare coverage that is taken into account to
determine the allowable length of preexisting condition exclusion periods (for individuals
entering group health plan coverage).
✔✔Consolidated Omnibus Budget Reconciliation Act (COBRA) - ✔✔Federal law that
requires employers to permit employees or their dependents to extend their health
insurance coverage at group rates for up to 36 months following a qualifying event, such
as a layoff, reduction in hours, or the employee's death.
