PSI LIFE INSURANCE EXAM PREPARATION
2026 ACTUAL EXAM SCRIPT FULL
QUESTIONS AND ANSWERS
⩥ What is a MIB report? Answer: medical information on an applicant
for assessing life or health insurance risk
⩥ All of the following are TRUE regarding incomplete applications
EXCEPT Answer: the incomplete application can be accepted with the
missing information added later.
⩥ Why are insurance policies considered conditional contracts? Answer:
Certain conditions need to be met to make the contract legally
enforceable.
⩥ When does insurable interest come into play in a life insurance
policy? Answer: when the applicant for the policy is not the insured
⩥ Which type of receipt makes the insurer liable for the risk from the
date of application, regardless of the applicant's insurability? Answer:
binding receipt
, ⩥ What specific new procedures does the USA Patriot Act require of
insurance companies? Answer: Establish an anti-money laundering
program
⩥ What is the purpose of Stranger-originated life insurance (STOLI)?
Answer: he policy originated primarily or solely for the purpose of
resale.
⩥ How do warranties differ from representations? Answer: a warranty is
guaranteed to be true, a representation is believed to be true to the best
of one's knowledge.
⩥ Obtaining consumer information reports under false pretenses is
prosecutable by which of the following? Answer: Fair Credit Reporting
Act
⩥ Which of the following was specifically designed to address STOLI
and IOLI practices? Answer: NCOIL Act
⩥ Which of the following occurs immediately after the application is
submitted and the initial premium paid? Answer: the underwriting
process begins
2026 ACTUAL EXAM SCRIPT FULL
QUESTIONS AND ANSWERS
⩥ What is a MIB report? Answer: medical information on an applicant
for assessing life or health insurance risk
⩥ All of the following are TRUE regarding incomplete applications
EXCEPT Answer: the incomplete application can be accepted with the
missing information added later.
⩥ Why are insurance policies considered conditional contracts? Answer:
Certain conditions need to be met to make the contract legally
enforceable.
⩥ When does insurable interest come into play in a life insurance
policy? Answer: when the applicant for the policy is not the insured
⩥ Which type of receipt makes the insurer liable for the risk from the
date of application, regardless of the applicant's insurability? Answer:
binding receipt
, ⩥ What specific new procedures does the USA Patriot Act require of
insurance companies? Answer: Establish an anti-money laundering
program
⩥ What is the purpose of Stranger-originated life insurance (STOLI)?
Answer: he policy originated primarily or solely for the purpose of
resale.
⩥ How do warranties differ from representations? Answer: a warranty is
guaranteed to be true, a representation is believed to be true to the best
of one's knowledge.
⩥ Obtaining consumer information reports under false pretenses is
prosecutable by which of the following? Answer: Fair Credit Reporting
Act
⩥ Which of the following was specifically designed to address STOLI
and IOLI practices? Answer: NCOIL Act
⩥ Which of the following occurs immediately after the application is
submitted and the initial premium paid? Answer: the underwriting
process begins
