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PSI LIFE INSURANCE EXAM TESTBANK ACTUAL
PREP QUESTIONS AND WELL REVISED ANSWERS -
LATEST AND COMPLETE UPDATE WITH VERIFIED
SOLUTIONS – ASSURES PASS
What kind of retirement plan can a 75-employee for profit corporation establish? -
ANSWER: Simple IRA
The taxable portion of a monthly income benefit paid during the annuity phase
from a nonqualified annuity is calculated using the - ANSWER: Exclusion ratio
Unfair claims settlement methods and practices by an insurance company include
all of the following acts EXCEPT - ANSWER: failure to pay all claims that are
reported within 90 days after a loss occurs
The settlement option that allows proceeds to remain with the insurer and the
earnings to be paid to the beneficiary on a monthly basis is called - ANSWER:
Interest only
Regulations on life insurance advertising apply to which of the following insurance
company materials? - ANSWER: A radio commercial that promotes the benefits
of a specific company's life insurance products
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An life insurance policy is required to contain which of the following provisions? -
ANSWER: A reinstatement provision during which the interest may be charge for
late payments
In which of the following fixed annuity features is the surrender value tied to
interest rates? - ANSWER: Market value adjustments
Which of the following policies allows for partial surrender? - ANSWER:
Universal Life
Any form that becomes part of an insurance contract must be filed at the Office of
the Commissioner of Insurance - ANSWER: Prior to its use
Keogh (HR 10) plans were designed to provide retirement benefits for -
ANSWER: Self-employed individuals
Which statements is NOT a characteristic of Group Life insurance plan? -
ANSWER: Individual underwriting
Insurance applications with an AVERAGE life expectancy without higher than
normal risk factors are considered which type of risk? - ANSWER: Standard
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Which of the following dividend options is taxable? - ANSWER: Accumulation at
interest
Which nonforfeiture option allows the policyowner to purchase less coverage for
life? - ANSWER: Reduced Paid-Up Insurance
Who is allowed to make changes to a life insurance contact terms? - ANSWER:
An officer of the company
Which of the following policies allows the policyowner to change two policy
features? - ANSWER: Adjustable Life
Which of the following provides a death benefit if the spouse of the insured dies? -
ANSWER: Family term insurance rider
Which of the following states BEST describes a single premium cash value policy?
- ANSWER: It provides for only one premium to be paid without evidence of
insurability
Universal life and variable life insurance policies contain many similar features.
Which of the following features is unique to variable universal life insurance? -
ANSWER: It includes the right to select the investment which will provide the
greatest return
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Which of the following is a potential DISADVANTAGE of a fixed annuity? -
ANSWER: Annuitants could experience a decrease in the purchasing power of
their payments over a period of years due to inflation
A premium is due on a life insurance policy the first of each month. The
policyowner failed to pay the premium and 20 days later the insured died. Under
which of the following provisions would the death benefit be paid? - ANSWER: a
nonforfeiture clause
The period after an annuity is purchased but before distributions begin is referred
to as the - ANSWER: accumulation phase
An insurance company may contest a life policy within a MAXIMUM of how
many years after the policy's effective date? - ANSWER: 2
All of the following factors are used in life insurance premium determination
EXCEPT - ANSWER: Morbidity
The authorization used to obtain the applicant's medical information that will be
used by the insurer for the primary purpose of determining eligibility must include:
- ANSWER: the time frame in which the insurer must release the eligibility
decision to the agent
PSI LIFE INSURANCE EXAM TESTBANK ACTUAL
PREP QUESTIONS AND WELL REVISED ANSWERS -
LATEST AND COMPLETE UPDATE WITH VERIFIED
SOLUTIONS – ASSURES PASS
What kind of retirement plan can a 75-employee for profit corporation establish? -
ANSWER: Simple IRA
The taxable portion of a monthly income benefit paid during the annuity phase
from a nonqualified annuity is calculated using the - ANSWER: Exclusion ratio
Unfair claims settlement methods and practices by an insurance company include
all of the following acts EXCEPT - ANSWER: failure to pay all claims that are
reported within 90 days after a loss occurs
The settlement option that allows proceeds to remain with the insurer and the
earnings to be paid to the beneficiary on a monthly basis is called - ANSWER:
Interest only
Regulations on life insurance advertising apply to which of the following insurance
company materials? - ANSWER: A radio commercial that promotes the benefits
of a specific company's life insurance products
,2|Page
An life insurance policy is required to contain which of the following provisions? -
ANSWER: A reinstatement provision during which the interest may be charge for
late payments
In which of the following fixed annuity features is the surrender value tied to
interest rates? - ANSWER: Market value adjustments
Which of the following policies allows for partial surrender? - ANSWER:
Universal Life
Any form that becomes part of an insurance contract must be filed at the Office of
the Commissioner of Insurance - ANSWER: Prior to its use
Keogh (HR 10) plans were designed to provide retirement benefits for -
ANSWER: Self-employed individuals
Which statements is NOT a characteristic of Group Life insurance plan? -
ANSWER: Individual underwriting
Insurance applications with an AVERAGE life expectancy without higher than
normal risk factors are considered which type of risk? - ANSWER: Standard
,3|Page
Which of the following dividend options is taxable? - ANSWER: Accumulation at
interest
Which nonforfeiture option allows the policyowner to purchase less coverage for
life? - ANSWER: Reduced Paid-Up Insurance
Who is allowed to make changes to a life insurance contact terms? - ANSWER:
An officer of the company
Which of the following policies allows the policyowner to change two policy
features? - ANSWER: Adjustable Life
Which of the following provides a death benefit if the spouse of the insured dies? -
ANSWER: Family term insurance rider
Which of the following states BEST describes a single premium cash value policy?
- ANSWER: It provides for only one premium to be paid without evidence of
insurability
Universal life and variable life insurance policies contain many similar features.
Which of the following features is unique to variable universal life insurance? -
ANSWER: It includes the right to select the investment which will provide the
greatest return
, 4|Page
Which of the following is a potential DISADVANTAGE of a fixed annuity? -
ANSWER: Annuitants could experience a decrease in the purchasing power of
their payments over a period of years due to inflation
A premium is due on a life insurance policy the first of each month. The
policyowner failed to pay the premium and 20 days later the insured died. Under
which of the following provisions would the death benefit be paid? - ANSWER: a
nonforfeiture clause
The period after an annuity is purchased but before distributions begin is referred
to as the - ANSWER: accumulation phase
An insurance company may contest a life policy within a MAXIMUM of how
many years after the policy's effective date? - ANSWER: 2
All of the following factors are used in life insurance premium determination
EXCEPT - ANSWER: Morbidity
The authorization used to obtain the applicant's medical information that will be
used by the insurer for the primary purpose of determining eligibility must include:
- ANSWER: the time frame in which the insurer must release the eligibility
decision to the agent
