2. policy title page
PSI LIFE INSURANCE PRACTICE EXAM- 3. insuring clause
4. definitions
SOLVED 100% UPDATED QUESTIONS
1 - ANSWER-When the courts look at a contract to determine the intent of the parties
AND VERIFIED ANSWERS which of the following is considered?
1. the entire contract
2. the relevant portions of the contract
1 - ANSWER-For an individual long-term care policy there is an annual dollar limit for 3. any material added to the basic contract
tax deductions that is based on which of the 4. any words that have ambiguous definitions
following?
1. age 3 - ANSWER-All of the following are tax qualified retirement plans EXCEPT
2. cost of care 1. Keogh.
3. policy value 2. 401(k).
4. premium cost 3. Section 529 plan.
4. SEP.
4 - ANSWER-The group conversion option is allowed for all of the following EXCEPT
1. termination of the master policy . 4 - ANSWER-All life insurance and health insurance contracts contain all of the
2. loss of group coverage due to termination of employment. following EXCEPT
3. upon the loss of eligibility on the part of a class of insureds. 1. Policy face
4. during the annual benefits enrollment period. 2. Insuring clause
3. Conditions
2 - ANSWER-What is the primary advantage for obtaining a reinstatement of a policy 4. Representations
rather than obtaining a new one?
1. No proof of insurability is required 4 - ANSWER-Which type of annuity attempts to offset inflation by providing a benefit
2. insured original issue age is used linked to an underlying investment account?
3. No application is required 1. deferred
4. outstanding loans are cancelled 2. fixed
3. immediate
4 - ANSWER-All of the following are features of the spendthrift clause EXCEPT 4. variable
1. proceeds are paid in some other way than a single lump sum.
2. proceeds are protected by the insurer from the beneficiary's creditors. 3 - ANSWER-All of the following are ownership rights EXCEPT
3. transfer of proceeds to creditors is prohibited. 1. changing the beneficiary of the policy
4. the beneficiary may encumber the proceeds. 2. borrowing funds against cash value
3. switching the policy from one insured to another
1 - ANSWER-Which of the following lists the three common types of permanent 4. assigning all of the rights of the policy to another person
individual life insurance?
1. Variable Life, Whole Life, Universal Life 1 - ANSWER-An insured and the beneficiary are both killed in a fatal accident. Which
2. Whole Life, Incidental Life, Term Life provision presumes the insured survived the
3. Universal Life, AD&D,Term Life beneficiary?
4. Group Life, Whole Life, Variable Life 1. common disaster clause
2. irrevocable beneficiary
3 - ANSWER-Which part of an insurance contract contains the promise to pay losses 3. contingent beneficiary
covered by the policy in exchange for the 4. endorsement method
insured's premium and compliance with policy terms?
1. conditions
, 1 - ANSWER-The right to change the beneficiary or dispose of the policy or its benefits 1 - ANSWER-What is the purpose of Stranger-originated life insurance (STOLi)?
in any manner one chooses is reserved to 1. the policy is originated primarily or solely for the purpose of resale
the policyowner UNLESS which of the following is true? 2. the policy is written so as to avoid proof of insurable interest
1. The policyowner has named an irrevocable beneficiary. 3. it is a method of insuring a person who has been previously declined.
2. The policyowner has named a revocable beneficiary. 4. it is a fraudulent policy meant for financial gain of someone unknown to the insured.
3. The policyowner deems the beneficiary unfit.
4. The insurer prohibits changes to beneficiaries. 3 - ANSWER-All of the following are required signatures on a life insurance application
EXCEPT
2 - ANSWER-In order to AVOID being classified as an MEC, a policy must pass which 1. the agent.
of the following? 2. the applicant.
1. five-pay test 3. the minor in a juvenile policy.
2. seven-pay test 4. the proposed insured.
3. policy loan test
4. accelerated benefits test 2 - ANSWER-Which policy provision permits the policyowner to take a specified number
of days to examine the contract, and allows for cancellation and a full refund if the
3 - ANSWER-Group AD&D policies may be deducted by whom and under which policyowner rejects the terms or costs?
deduction category? 1. Exclusions
1. the employee under business expenses 2. Free look
2. the employee under medical expenses 3. Grace period
3. the employer under business expenses 4. Insuring Clause
4. the employer under workers' compensation deduction
4 - ANSWER-All of the following are classifications of risk EXCEPT
2 - ANSWER-Which of the following is TRUE of the limited pay whole life policy? 1. substandard .
1. Coverage ends when the policy is paid-up. 2. preferred.
2. Coverage continues after the policy is paid-up. 3. declined.
3. Premium payments increase as the insured ages. 4. non-nicotine.
4. Premium payments are lower than continuous premium whole life.
2 - ANSWER-Which one of the following is particularly important for an insurance
3 - ANSWER-Which of the following is common in an increasing term life policy? producer to explain to a client upon delivery of a
1. Insurance protection decreases over time. life insurance policy?
2. The premium increases over time. 1. the effective date
3. It begins with little or no insurance protection. 2. any exclusions
4. It is used as mortgage credit insurance. 3. premium due dates
4. loan interest rates
4 - ANSWER-All of the following are TRUE regarding incomplete applications EXCEPT
1. the underwriting department will return the application to the agent. 1 - ANSWER-Which whole life policy premium type is the most common?
2. the applicant will have to wait additional time before coverage begins. 1. continuous premium
3. there will be a delay in the underwriting process. 2. non-participating
4. the incomplete application can be accepted with the missing information added later. 3. limited payment
4. single premium
2 - ANSWER-Which of the following refers to how often a premium is paid?
1. level 4 - ANSWER-If the insurer wishes to share an applicant's HIV status, the applicant must
2. mode be given full notice of all of the following
3. net EXCEPT
4. ratio 1. insurer's practices with respect to the treatment of this information.
2. the applicant's rights to maintain privacy.
PSI LIFE INSURANCE PRACTICE EXAM- 3. insuring clause
4. definitions
SOLVED 100% UPDATED QUESTIONS
1 - ANSWER-When the courts look at a contract to determine the intent of the parties
AND VERIFIED ANSWERS which of the following is considered?
1. the entire contract
2. the relevant portions of the contract
1 - ANSWER-For an individual long-term care policy there is an annual dollar limit for 3. any material added to the basic contract
tax deductions that is based on which of the 4. any words that have ambiguous definitions
following?
1. age 3 - ANSWER-All of the following are tax qualified retirement plans EXCEPT
2. cost of care 1. Keogh.
3. policy value 2. 401(k).
4. premium cost 3. Section 529 plan.
4. SEP.
4 - ANSWER-The group conversion option is allowed for all of the following EXCEPT
1. termination of the master policy . 4 - ANSWER-All life insurance and health insurance contracts contain all of the
2. loss of group coverage due to termination of employment. following EXCEPT
3. upon the loss of eligibility on the part of a class of insureds. 1. Policy face
4. during the annual benefits enrollment period. 2. Insuring clause
3. Conditions
2 - ANSWER-What is the primary advantage for obtaining a reinstatement of a policy 4. Representations
rather than obtaining a new one?
1. No proof of insurability is required 4 - ANSWER-Which type of annuity attempts to offset inflation by providing a benefit
2. insured original issue age is used linked to an underlying investment account?
3. No application is required 1. deferred
4. outstanding loans are cancelled 2. fixed
3. immediate
4 - ANSWER-All of the following are features of the spendthrift clause EXCEPT 4. variable
1. proceeds are paid in some other way than a single lump sum.
2. proceeds are protected by the insurer from the beneficiary's creditors. 3 - ANSWER-All of the following are ownership rights EXCEPT
3. transfer of proceeds to creditors is prohibited. 1. changing the beneficiary of the policy
4. the beneficiary may encumber the proceeds. 2. borrowing funds against cash value
3. switching the policy from one insured to another
1 - ANSWER-Which of the following lists the three common types of permanent 4. assigning all of the rights of the policy to another person
individual life insurance?
1. Variable Life, Whole Life, Universal Life 1 - ANSWER-An insured and the beneficiary are both killed in a fatal accident. Which
2. Whole Life, Incidental Life, Term Life provision presumes the insured survived the
3. Universal Life, AD&D,Term Life beneficiary?
4. Group Life, Whole Life, Variable Life 1. common disaster clause
2. irrevocable beneficiary
3 - ANSWER-Which part of an insurance contract contains the promise to pay losses 3. contingent beneficiary
covered by the policy in exchange for the 4. endorsement method
insured's premium and compliance with policy terms?
1. conditions
, 1 - ANSWER-The right to change the beneficiary or dispose of the policy or its benefits 1 - ANSWER-What is the purpose of Stranger-originated life insurance (STOLi)?
in any manner one chooses is reserved to 1. the policy is originated primarily or solely for the purpose of resale
the policyowner UNLESS which of the following is true? 2. the policy is written so as to avoid proof of insurable interest
1. The policyowner has named an irrevocable beneficiary. 3. it is a method of insuring a person who has been previously declined.
2. The policyowner has named a revocable beneficiary. 4. it is a fraudulent policy meant for financial gain of someone unknown to the insured.
3. The policyowner deems the beneficiary unfit.
4. The insurer prohibits changes to beneficiaries. 3 - ANSWER-All of the following are required signatures on a life insurance application
EXCEPT
2 - ANSWER-In order to AVOID being classified as an MEC, a policy must pass which 1. the agent.
of the following? 2. the applicant.
1. five-pay test 3. the minor in a juvenile policy.
2. seven-pay test 4. the proposed insured.
3. policy loan test
4. accelerated benefits test 2 - ANSWER-Which policy provision permits the policyowner to take a specified number
of days to examine the contract, and allows for cancellation and a full refund if the
3 - ANSWER-Group AD&D policies may be deducted by whom and under which policyowner rejects the terms or costs?
deduction category? 1. Exclusions
1. the employee under business expenses 2. Free look
2. the employee under medical expenses 3. Grace period
3. the employer under business expenses 4. Insuring Clause
4. the employer under workers' compensation deduction
4 - ANSWER-All of the following are classifications of risk EXCEPT
2 - ANSWER-Which of the following is TRUE of the limited pay whole life policy? 1. substandard .
1. Coverage ends when the policy is paid-up. 2. preferred.
2. Coverage continues after the policy is paid-up. 3. declined.
3. Premium payments increase as the insured ages. 4. non-nicotine.
4. Premium payments are lower than continuous premium whole life.
2 - ANSWER-Which one of the following is particularly important for an insurance
3 - ANSWER-Which of the following is common in an increasing term life policy? producer to explain to a client upon delivery of a
1. Insurance protection decreases over time. life insurance policy?
2. The premium increases over time. 1. the effective date
3. It begins with little or no insurance protection. 2. any exclusions
4. It is used as mortgage credit insurance. 3. premium due dates
4. loan interest rates
4 - ANSWER-All of the following are TRUE regarding incomplete applications EXCEPT
1. the underwriting department will return the application to the agent. 1 - ANSWER-Which whole life policy premium type is the most common?
2. the applicant will have to wait additional time before coverage begins. 1. continuous premium
3. there will be a delay in the underwriting process. 2. non-participating
4. the incomplete application can be accepted with the missing information added later. 3. limited payment
4. single premium
2 - ANSWER-Which of the following refers to how often a premium is paid?
1. level 4 - ANSWER-If the insurer wishes to share an applicant's HIV status, the applicant must
2. mode be given full notice of all of the following
3. net EXCEPT
4. ratio 1. insurer's practices with respect to the treatment of this information.
2. the applicant's rights to maintain privacy.
