PSI - NY Life, Accident and Health Practice Exam
2026 Complete Practice Exam with ANSWERs and
Detailed Rationales!! ACTUAL
Question 1: Which policy provision permits the policy owner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms
or costs?
A) Grace Period
B) Free Look
C) Incontestability
D) Reinstatement
ANSWER✔✨-: B) Free Look
Rationale:
A) Grace Period - INCORRECT. The grace period is the time after a premium due date during which the
policy remains in force even though the premium has not been paid. It does not allow for examination
and cancellation of the policy.
B) Free Look - CORRECT. The free look provision gives the policyowner a specified period (typically 10-30
days in New York) to review the policy and return it for a full premium refund if dissatisfied.
C) Incontestability - INCORRECT. This provision prevents the insurer from contesting the policy after it
has been in force for a specified period (usually 2 years), except for fraud.
D) Reinstatement - INCORRECT. Reinstatement allows a lapsed policy to be put back in force under
certain conditions, not related to policy examination.
Question 2: When will a policy pay on a UCR basis?
A) When the insured chooses any provider
B) When particular benefits are not listed on a payment schedule
C) When the policy is a PPO
,D) When services are rendered out-of-network
ANSWER✔✨-: B) When particular benefits are not listed on a payment schedule
Rationale:
A) When the insured chooses any provider - INCORRECT. Provider choice alone does not determine UCR
payment; it's based on benefit structure.
B) When particular benefits are not listed on a payment schedule - CORRECT. UCR (Usual, Customary,
and Reasonable) basis is used when specific benefits aren't scheduled, paying based on what is typically
charged in the geographic area.
C) When the policy is a PPO - INCORRECT. While PPOs may use UCR, this is not the determining factor
for UCR payment.
D) When services are rendered out-of-network - INCORRECT. Out-of-network services may use UCR, but
the key factor is whether benefits are scheduled or not.
Question 3: Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility?
A) Waiver of Premium rider
B) Accidental Death rider
C) Long Term Care rider
D) Guaranteed Insurability rider
ANSWER✔✨-: C) Long Term Care rider
Rationale:
A) Waiver of Premium rider - INCORRECT. This rider waives premium payments if the insured becomes
disabled, but does not cover nursing home expenses.
B) Accidental Death rider - INCORRECT. This provides additional death benefits if death occurs due to
accident, not care facility expenses.
C) Long Term Care rider - CORRECT. LTC riders specifically cover expenses for custodial care in nursing
homes, convalescent facilities, or home health care.
D) Guaranteed Insurability rider - INCORRECT. This allows purchase of additional coverage without
evidence of insurability at specified times.
Question 4: Which of the following is exempted from the incontestability provision in insurance policies?
A) Age misstatement
B) Fraudulent misstatements
C) Health condition changes
,D) Occupation changes
ANSWER✔✨-: B) Fraudulent misstatements
Rationale:
A) Age misstatement - INCORRECT. Age misstatements are typically adjusted by changing benefits or
premiums, not exempted from incontestability.
B) Fraudulent misstatements - CORRECT. Fraud is always exempt from incontestability provisions;
insurers can contest policies at any time if fraud is proven.
C) Health condition changes - INCORRECT. Changes in health after policy issue are covered and not
grounds for contesting.
D) Occupation changes - INCORRECT. Occupation changes after issue don't affect incontestability.
Question 5: In New York, what is the minimum free look period for life insurance policies?
A) 10 days
B) 15 days
C) 20 days
D) 30 days
ANSWER✔✨-: A) 10 days
Rationale:
A) 10 days - CORRECT. New York Insurance Law requires a minimum 10-day free look period for life
insurance policies.
B) 15 days - INCORRECT. While some states use 15 days, New York's minimum is 10 days.
C) 20 days - INCORRECT. This is not the NY minimum requirement.
D) 30 days - INCORRECT. While some policies may offer 30 days, the NY minimum is 10 days.
Question 6: Which provision states that the policy and the application constitute the entire contract
between the parties?
A) Assignment provision
B) Entire Contract provision
C) Ownership provision
D) Consideration provision
ANSWER✔✨-: B) Entire Contract provision
Rationale:
, A) Assignment provision - INCORRECT. This deals with transfer of policy ownership rights.
B) Entire Contract provision - CORRECT. This provision states that only the policy and attached
application make up the contract, preventing either party from claiming other agreements exist.
C) Ownership provision - INCORRECT. This defines who owns the policy and their rights.
D) Consideration provision - INCORRECT. This refers to the premium and application as consideration for
the contract.
Question 7: What happens to a life insurance policy if the premium is not paid by the end of the grace
period?
A) It is automatically reinstated
B) It lapses
C) It converts to term insurance
D) It becomes paid-up
ANSWER✔✨-: B) It lapses
Rationale:
A) It is automatically reinstated - INCORRECT. Reinstatement requires application and evidence of
insurability, it's not automatic.
B) It lapses - CORRECT. If premium is not paid by the end of the grace period (typically 31 days), the
policy lapses and coverage terminates.
C) It converts to term insurance - INCORRECT. This does not happen automatically; conversion is a
different policy feature.
D) It becomes paid-up - INCORRECT. Paid-up status requires sufficient cash value to cover premiums, not
non-payment.
Question 8: Which type of insurance policy provides coverage for a specified period and pays benefits
only if the insured dies during that period?
A) Whole Life
B) Universal Life
C) Term Life
D) Variable Life
ANSWER✔✨-: C) Term Life
Rationale:
A) Whole Life - INCORRECT. Whole life provides lifetime coverage and builds cash value, not just for a
specified period.
2026 Complete Practice Exam with ANSWERs and
Detailed Rationales!! ACTUAL
Question 1: Which policy provision permits the policy owner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms
or costs?
A) Grace Period
B) Free Look
C) Incontestability
D) Reinstatement
ANSWER✔✨-: B) Free Look
Rationale:
A) Grace Period - INCORRECT. The grace period is the time after a premium due date during which the
policy remains in force even though the premium has not been paid. It does not allow for examination
and cancellation of the policy.
B) Free Look - CORRECT. The free look provision gives the policyowner a specified period (typically 10-30
days in New York) to review the policy and return it for a full premium refund if dissatisfied.
C) Incontestability - INCORRECT. This provision prevents the insurer from contesting the policy after it
has been in force for a specified period (usually 2 years), except for fraud.
D) Reinstatement - INCORRECT. Reinstatement allows a lapsed policy to be put back in force under
certain conditions, not related to policy examination.
Question 2: When will a policy pay on a UCR basis?
A) When the insured chooses any provider
B) When particular benefits are not listed on a payment schedule
C) When the policy is a PPO
,D) When services are rendered out-of-network
ANSWER✔✨-: B) When particular benefits are not listed on a payment schedule
Rationale:
A) When the insured chooses any provider - INCORRECT. Provider choice alone does not determine UCR
payment; it's based on benefit structure.
B) When particular benefits are not listed on a payment schedule - CORRECT. UCR (Usual, Customary,
and Reasonable) basis is used when specific benefits aren't scheduled, paying based on what is typically
charged in the geographic area.
C) When the policy is a PPO - INCORRECT. While PPOs may use UCR, this is not the determining factor
for UCR payment.
D) When services are rendered out-of-network - INCORRECT. Out-of-network services may use UCR, but
the key factor is whether benefits are scheduled or not.
Question 3: Which type of rider reimburses health and social service expenses incurred in a
convalescent or nursing home facility?
A) Waiver of Premium rider
B) Accidental Death rider
C) Long Term Care rider
D) Guaranteed Insurability rider
ANSWER✔✨-: C) Long Term Care rider
Rationale:
A) Waiver of Premium rider - INCORRECT. This rider waives premium payments if the insured becomes
disabled, but does not cover nursing home expenses.
B) Accidental Death rider - INCORRECT. This provides additional death benefits if death occurs due to
accident, not care facility expenses.
C) Long Term Care rider - CORRECT. LTC riders specifically cover expenses for custodial care in nursing
homes, convalescent facilities, or home health care.
D) Guaranteed Insurability rider - INCORRECT. This allows purchase of additional coverage without
evidence of insurability at specified times.
Question 4: Which of the following is exempted from the incontestability provision in insurance policies?
A) Age misstatement
B) Fraudulent misstatements
C) Health condition changes
,D) Occupation changes
ANSWER✔✨-: B) Fraudulent misstatements
Rationale:
A) Age misstatement - INCORRECT. Age misstatements are typically adjusted by changing benefits or
premiums, not exempted from incontestability.
B) Fraudulent misstatements - CORRECT. Fraud is always exempt from incontestability provisions;
insurers can contest policies at any time if fraud is proven.
C) Health condition changes - INCORRECT. Changes in health after policy issue are covered and not
grounds for contesting.
D) Occupation changes - INCORRECT. Occupation changes after issue don't affect incontestability.
Question 5: In New York, what is the minimum free look period for life insurance policies?
A) 10 days
B) 15 days
C) 20 days
D) 30 days
ANSWER✔✨-: A) 10 days
Rationale:
A) 10 days - CORRECT. New York Insurance Law requires a minimum 10-day free look period for life
insurance policies.
B) 15 days - INCORRECT. While some states use 15 days, New York's minimum is 10 days.
C) 20 days - INCORRECT. This is not the NY minimum requirement.
D) 30 days - INCORRECT. While some policies may offer 30 days, the NY minimum is 10 days.
Question 6: Which provision states that the policy and the application constitute the entire contract
between the parties?
A) Assignment provision
B) Entire Contract provision
C) Ownership provision
D) Consideration provision
ANSWER✔✨-: B) Entire Contract provision
Rationale:
, A) Assignment provision - INCORRECT. This deals with transfer of policy ownership rights.
B) Entire Contract provision - CORRECT. This provision states that only the policy and attached
application make up the contract, preventing either party from claiming other agreements exist.
C) Ownership provision - INCORRECT. This defines who owns the policy and their rights.
D) Consideration provision - INCORRECT. This refers to the premium and application as consideration for
the contract.
Question 7: What happens to a life insurance policy if the premium is not paid by the end of the grace
period?
A) It is automatically reinstated
B) It lapses
C) It converts to term insurance
D) It becomes paid-up
ANSWER✔✨-: B) It lapses
Rationale:
A) It is automatically reinstated - INCORRECT. Reinstatement requires application and evidence of
insurability, it's not automatic.
B) It lapses - CORRECT. If premium is not paid by the end of the grace period (typically 31 days), the
policy lapses and coverage terminates.
C) It converts to term insurance - INCORRECT. This does not happen automatically; conversion is a
different policy feature.
D) It becomes paid-up - INCORRECT. Paid-up status requires sufficient cash value to cover premiums, not
non-payment.
Question 8: Which type of insurance policy provides coverage for a specified period and pays benefits
only if the insured dies during that period?
A) Whole Life
B) Universal Life
C) Term Life
D) Variable Life
ANSWER✔✨-: C) Term Life
Rationale:
A) Whole Life - INCORRECT. Whole life provides lifetime coverage and builds cash value, not just for a
specified period.
