PSI Insurance Exam 2026 Questions and
Answers
What is it called when a life insurance policy pays a multiple of the coverage
amount when certain types of accidents occur? - Correct answer-multiple
indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid
AFTER the time granted by the insurer, what is the maximum amount of time for
reinstatement of the policy? - Correct answer-30 days
Which of the following statements regarding a pure life annuity payout option is
correct? - Correct answer-This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses
provision in health insurance policies? - Correct answer-fraudulent misstatements
If an individual is insured by both their own health insurance policy and their
spouse's policy, which policy pays first in the event of an illness? - Correct answer-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,The individual's policy pays first, the spouse's policy pays the remaining up to
coverage amount.
When can the premiums of an individually owned health insurance policy be
deducted from the individual's income tax? - Correct answer-when the taxpayer's
unreimbursed medical expenses exceed 7.5% of adjusted gross income during a
taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is
not covered during the policy's initial - Correct answer-2 year period.
Which of the following is a characteristic of Health Maintenance Organizations
(HMOs)? - Correct answer-preventive care
The life insurance policy will not be truly effective until all of the following occur
EXCEPT - Correct answer-the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and
insured at the time of application? - Correct answer-when a third-party applicant
names themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance
policy? - Correct answer-The cash value earnings are based on the performance of
the separate account.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,The person who receives the benefit of an annuity is known as the - Correct
answer-annuitant.
Which of the following is an example of a premium payment mode? - Correct
answer-annual premium payment
How do most disability policies handle the case of a recurrent disability occurring
at least 90 days after the first claim? - Correct answer-it must be handled as a new
claim for a new period of disability, requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? - Correct
answer-Routine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be
excluded after how many months from the effective date of the policy? - Correct
answer-6 months
What does an application for insurance contractually represent for the insured? -
Correct answer-an offer
Which of the following is exempted from the incontestability provision in
insurance policies? - Correct answer-fraudulent misstatements
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Which of the following may be thought of as a time deductible rather than a dollar
deductible in a disability income policy because benefits are not payable during
that time? - Correct answer-elimination period
How long after being entitled to Social Security disability benefits will an
individual be eligible to receive Medicare benefits? - Correct answer-2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds
received under the policy will be - Correct answer-considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to
an underlying investment account? - Correct answer-variable
What is a MIB report? - Correct answer-medical information on an applicant for
assessing life or health insurance risk
Group Life Policies typically include which of the following provisions? - Correct
answer-conversion privilege
In a case where an individual's health is insured by both their own policy and their
spouse's policy, which policy pays in the event of an illness? - Correct answer-The
individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
Answers
What is it called when a life insurance policy pays a multiple of the coverage
amount when certain types of accidents occur? - Correct answer-multiple
indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid
AFTER the time granted by the insurer, what is the maximum amount of time for
reinstatement of the policy? - Correct answer-30 days
Which of the following statements regarding a pure life annuity payout option is
correct? - Correct answer-This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses
provision in health insurance policies? - Correct answer-fraudulent misstatements
If an individual is insured by both their own health insurance policy and their
spouse's policy, which policy pays first in the event of an illness? - Correct answer-
©COPYRIGHT 2025, ALL RIGHTS RESERVED 1
,The individual's policy pays first, the spouse's policy pays the remaining up to
coverage amount.
When can the premiums of an individually owned health insurance policy be
deducted from the individual's income tax? - Correct answer-when the taxpayer's
unreimbursed medical expenses exceed 7.5% of adjusted gross income during a
taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is
not covered during the policy's initial - Correct answer-2 year period.
Which of the following is a characteristic of Health Maintenance Organizations
(HMOs)? - Correct answer-preventive care
The life insurance policy will not be truly effective until all of the following occur
EXCEPT - Correct answer-the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and
insured at the time of application? - Correct answer-when a third-party applicant
names themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance
policy? - Correct answer-The cash value earnings are based on the performance of
the separate account.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 2
,The person who receives the benefit of an annuity is known as the - Correct
answer-annuitant.
Which of the following is an example of a premium payment mode? - Correct
answer-annual premium payment
How do most disability policies handle the case of a recurrent disability occurring
at least 90 days after the first claim? - Correct answer-it must be handled as a new
claim for a new period of disability, requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? - Correct
answer-Routine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be
excluded after how many months from the effective date of the policy? - Correct
answer-6 months
What does an application for insurance contractually represent for the insured? -
Correct answer-an offer
Which of the following is exempted from the incontestability provision in
insurance policies? - Correct answer-fraudulent misstatements
©COPYRIGHT 2025, ALL RIGHTS RESERVED 3
, Which of the following may be thought of as a time deductible rather than a dollar
deductible in a disability income policy because benefits are not payable during
that time? - Correct answer-elimination period
How long after being entitled to Social Security disability benefits will an
individual be eligible to receive Medicare benefits? - Correct answer-2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds
received under the policy will be - Correct answer-considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to
an underlying investment account? - Correct answer-variable
What is a MIB report? - Correct answer-medical information on an applicant for
assessing life or health insurance risk
Group Life Policies typically include which of the following provisions? - Correct
answer-conversion privilege
In a case where an individual's health is insured by both their own policy and their
spouse's policy, which policy pays in the event of an illness? - Correct answer-The
individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
©COPYRIGHT 2025, ALL RIGHTS RESERVED 4
