PSI Practice exam NJ
A: a warranty is guaranteed to be true, a representation is believed to be true to the best of
one's knowledge - ANS-How do warranties differ from representations?
A: a warranty is guaranteed to be true, a representation is believed to be true to the best of
one's knowledge
B: a representation is guaranteed to be true, a warranty is believed to be true to the best of
one's knowledge
C: a warranty is issued by the insurer, a representation is a statement provided by the applicant
D: an incorrect representation automatically voids a contract, whereas an incorrect warranty
must be proven
A: age - ANS-for an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following:
A: age
B: cost of care
C: policy value
D: premium cost
A: annual premium payment - ANS-which of the following is an example of a premium payment
mode:
A: annual premium payment
B: payment by check
C: automatic deduction of premium
D: $200 per policy year
A: common disaster clause - ANS-an insured and the beneficiary are both killed in a fatal
accident. which provision presumes the insured survived the beneficiary:
A: common disaster clause
B: irrevocable beneficiary
C: contingent beneficiary
D: endorsement method
A: continuous premium - ANS-whole life policy premium type is the most common:
A: continuous premium
B: non-participating
C: limited payment
D: single premium
A: convertible - ANS-which of the following term insurance types provides temporary protection
that can be changed to some type of permanent protection without evidence of insurability:
A: convertible
, B: decreasing
C: level
D: reentry
A: fraudulent misstatements - ANS-which of the following is exempted form the incontestability
provision in insurance policies:
A: fraudulent misstatements
B: pre-existing conditions
C: change in health
D: changes in the insurance code
A: interest rates - ANS-current assumption whole life policies are sensitive to which of the
following:
A: interest rates
B: age of the insured
C: health of the insured
D: current cash value of the policy
A: it is financially insufficient to cover end of life expense - ANS-why is relying solely on
employer group life insurance generally considered inadequate for most individual needs:
A: it is financially insufficient to cover end of life expense
A: key person insurance - ANS-what type of insurance should a company purchase if it wants to
insure the life of its CEO:
A: key person insurance
B: BOE insurance
C: group life policy
D: industrial policy
A: the applicant and possibly the agent initial any changes made - ANS-what producer is used
by an insurer to protect itself in the event a dispute arises and the applicant and the agent do
not recall the changes that were made in completed application:
A: the applicant and possibly the agent initial any changes made
B: the applicant and the agent sign a document that outlines the changes made
C: an arbitration agreement is signed at the time of the signing of the application
D: all changes must be approved by the underwriter prior to the submission of the application
A: the entire contract - ANS-when the courts look at a contract to determine the intent of the
parties which of the following is considered:
A: the entire contract
B: the relevant portions of the contract
C: any material added to the basic contract
D: any words that have ambiguous definitions
A: a warranty is guaranteed to be true, a representation is believed to be true to the best of
one's knowledge - ANS-How do warranties differ from representations?
A: a warranty is guaranteed to be true, a representation is believed to be true to the best of
one's knowledge
B: a representation is guaranteed to be true, a warranty is believed to be true to the best of
one's knowledge
C: a warranty is issued by the insurer, a representation is a statement provided by the applicant
D: an incorrect representation automatically voids a contract, whereas an incorrect warranty
must be proven
A: age - ANS-for an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following:
A: age
B: cost of care
C: policy value
D: premium cost
A: annual premium payment - ANS-which of the following is an example of a premium payment
mode:
A: annual premium payment
B: payment by check
C: automatic deduction of premium
D: $200 per policy year
A: common disaster clause - ANS-an insured and the beneficiary are both killed in a fatal
accident. which provision presumes the insured survived the beneficiary:
A: common disaster clause
B: irrevocable beneficiary
C: contingent beneficiary
D: endorsement method
A: continuous premium - ANS-whole life policy premium type is the most common:
A: continuous premium
B: non-participating
C: limited payment
D: single premium
A: convertible - ANS-which of the following term insurance types provides temporary protection
that can be changed to some type of permanent protection without evidence of insurability:
A: convertible
, B: decreasing
C: level
D: reentry
A: fraudulent misstatements - ANS-which of the following is exempted form the incontestability
provision in insurance policies:
A: fraudulent misstatements
B: pre-existing conditions
C: change in health
D: changes in the insurance code
A: interest rates - ANS-current assumption whole life policies are sensitive to which of the
following:
A: interest rates
B: age of the insured
C: health of the insured
D: current cash value of the policy
A: it is financially insufficient to cover end of life expense - ANS-why is relying solely on
employer group life insurance generally considered inadequate for most individual needs:
A: it is financially insufficient to cover end of life expense
A: key person insurance - ANS-what type of insurance should a company purchase if it wants to
insure the life of its CEO:
A: key person insurance
B: BOE insurance
C: group life policy
D: industrial policy
A: the applicant and possibly the agent initial any changes made - ANS-what producer is used
by an insurer to protect itself in the event a dispute arises and the applicant and the agent do
not recall the changes that were made in completed application:
A: the applicant and possibly the agent initial any changes made
B: the applicant and the agent sign a document that outlines the changes made
C: an arbitration agreement is signed at the time of the signing of the application
D: all changes must be approved by the underwriter prior to the submission of the application
A: the entire contract - ANS-when the courts look at a contract to determine the intent of the
parties which of the following is considered:
A: the entire contract
B: the relevant portions of the contract
C: any material added to the basic contract
D: any words that have ambiguous definitions
