PSI: LIFE, ACCIDENT, AND HEALTH
PRACTICE EXAM
Under the misstatement of age or gender provision, what happens if it is determined at
death that the insured's age or gender was misstated on a life insurance policy
application? ...ANSWER...Benefits are adjusted to an amount that the premium would
have purchased at the correct age or gender.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as thereafter as is reasonably
possible? ...ANSWER...Notice of claim.
When will a policy pay on a UCR basis? ...ANSWER...When particular benefits are not
listed on a payment schedule.
All of the following are non-forfeiture options EXCEPT ...ANSWER...Cash dividend
option.
What happens when the lifetime maximum benefit limit has been
reached? ...ANSWER...The insured will pay all of the remaining medial costs for as long
as the policy is in force.
Whose responsibility is it to make sure that the company is notified of a death claim at
the earliest possible opportunity (in most cases)? ...ANSWER...The producer.
What is the waiver of premium provision? ...ANSWER...In a long term care contract, the
premium is waived after the insured has been confined for a specific period of time.
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while? ...ANSWER...Committing a misdemeanor
Which is a disadvantage to a flexible premium annuity? ...ANSWER...The actual
amount of the annuity benefit cannot be determined in advance.
What does coninsurance mean? ...ANSWER...The insurer and the insured share
expenses over the deductible.
, Under normal conditions which of the following is TRUE for proof of loss when a single
loss is claimed? ...ANSWER...The insured has 90 days from the date of loss to provide
proof of loss.
Which one of the following represents an advantage of obtaining a policy loan versus a
withdrawal? ...ANSWER...The loan is not taxed while a withdrawal is taxed for amounts
above the contract cost basis.
All of the following statements define preexisting conditions
EXCEPT? ...ANSWER...Any chronic health condition that presents symptoms and
which was unknown at the time of application.
Which is the difference between participating and non-
participating? ...ANSWER...Participating policies pay dividends while non-participating
policies do not.
How does the per captia rule apply to proceeds from a life insurance
policy? ...ANSWER...The proceeds are divided equally among living primary
beneficiaries.
How does a noncancelable policy differ from a guaranteed renewable
policy? ...ANSWER...With the noncancelable policy the insurer may increase premiums
only based on the terms of the policy.
Which of the following refers to how often a premium is paid? ...ANSWER...Mode
What is the return of premium rider? ...ANSWER...An increasing amount of term
insurance that always equals the total of premiums paid up to the current point.
What does first dollar coverage mean? ...ANSWER...As soon as covered medical
expenses are incurred, the policy begins to pay.
When the suicide clause is inserted in a life insurance contract, death by suicide is not
covered during the policy's initial: ...ANSWER...2 year period
All of the following are required signatures on a life insurance application
EXCEPT? ...ANSWER...The minor in a juvenile policy.
What is the purpose of Stranger-originated life insurance (STOLI)? ...ANSWER...The
policy is originated primarily or solely for the purpose of resale.
What procedure is used by an insurer to protect itself in the event a dispute arises and
the applicant and the agent do not recall the changes that were made in a completed
application? ...ANSWER...The applicant and possibly the agent initial any changes
made.
PRACTICE EXAM
Under the misstatement of age or gender provision, what happens if it is determined at
death that the insured's age or gender was misstated on a life insurance policy
application? ...ANSWER...Benefits are adjusted to an amount that the premium would
have purchased at the correct age or gender.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as thereafter as is reasonably
possible? ...ANSWER...Notice of claim.
When will a policy pay on a UCR basis? ...ANSWER...When particular benefits are not
listed on a payment schedule.
All of the following are non-forfeiture options EXCEPT ...ANSWER...Cash dividend
option.
What happens when the lifetime maximum benefit limit has been
reached? ...ANSWER...The insured will pay all of the remaining medial costs for as long
as the policy is in force.
Whose responsibility is it to make sure that the company is notified of a death claim at
the earliest possible opportunity (in most cases)? ...ANSWER...The producer.
What is the waiver of premium provision? ...ANSWER...In a long term care contract, the
premium is waived after the insured has been confined for a specific period of time.
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while? ...ANSWER...Committing a misdemeanor
Which is a disadvantage to a flexible premium annuity? ...ANSWER...The actual
amount of the annuity benefit cannot be determined in advance.
What does coninsurance mean? ...ANSWER...The insurer and the insured share
expenses over the deductible.
, Under normal conditions which of the following is TRUE for proof of loss when a single
loss is claimed? ...ANSWER...The insured has 90 days from the date of loss to provide
proof of loss.
Which one of the following represents an advantage of obtaining a policy loan versus a
withdrawal? ...ANSWER...The loan is not taxed while a withdrawal is taxed for amounts
above the contract cost basis.
All of the following statements define preexisting conditions
EXCEPT? ...ANSWER...Any chronic health condition that presents symptoms and
which was unknown at the time of application.
Which is the difference between participating and non-
participating? ...ANSWER...Participating policies pay dividends while non-participating
policies do not.
How does the per captia rule apply to proceeds from a life insurance
policy? ...ANSWER...The proceeds are divided equally among living primary
beneficiaries.
How does a noncancelable policy differ from a guaranteed renewable
policy? ...ANSWER...With the noncancelable policy the insurer may increase premiums
only based on the terms of the policy.
Which of the following refers to how often a premium is paid? ...ANSWER...Mode
What is the return of premium rider? ...ANSWER...An increasing amount of term
insurance that always equals the total of premiums paid up to the current point.
What does first dollar coverage mean? ...ANSWER...As soon as covered medical
expenses are incurred, the policy begins to pay.
When the suicide clause is inserted in a life insurance contract, death by suicide is not
covered during the policy's initial: ...ANSWER...2 year period
All of the following are required signatures on a life insurance application
EXCEPT? ...ANSWER...The minor in a juvenile policy.
What is the purpose of Stranger-originated life insurance (STOLI)? ...ANSWER...The
policy is originated primarily or solely for the purpose of resale.
What procedure is used by an insurer to protect itself in the event a dispute arises and
the applicant and the agent do not recall the changes that were made in a completed
application? ...ANSWER...The applicant and possibly the agent initial any changes
made.
