PSI: LIFE, ACCIDENT, AND HEALTH
PRACTICE EXAM QUESTIONS WITH
DETAILED VERIFIED ANSWERS 100%
CORRECT ANSWERS ALREADY
GRADED A+
"How does a noncancelable policy differ from a guaranteed renewable policy? - CORRECT ANSWER=>
With the noncancelable policy the insurer may increase premiums only based on the terms of the
policy."
"Which of the following refers to how often a premium is paid? - CORRECT ANSWER=> Mode"
"What is the return of premium rider? - CORRECT ANSWER=> An increasing amount of term insurance
that always equals the total of premiums paid up to the current point."
"What does first dollar coverage mean? - CORRECT ANSWER=> As soon as covered medical expenses
are incurred, the policy begins to pay."
"When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during
the policy's initial: - CORRECT ANSWER=> 2 year period"
"All of the following are required signatures on a life insurance application EXCEPT? - CORRECT
ANSWER=> The minor in a juvenile policy."
"What is the purpose of Stranger-originated life insurance (STOLI)? - CORRECT ANSWER=> The policy is
originated primarily or solely for the purpose of resale."
"What procedure 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 a completed application? - CORRECT
ANSWER=> The applicant and possibly the agent initial any changes made."
"What specific new procedures does the USA Patriot Act require of insurance program? - CORRECT
ANSWER=> Establish an anti-money laundering program."
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, "Which of the following occurs immediately after the application is submitted and the initial premium
paid? - CORRECT ANSWER=> The underwriting process begins."
"A consumer report used to determine eligibility for insurance may include all of the following EXCEPT? -
CORRECT ANSWER=> Medical Underwriting exam."
"Why are insurance policies considered conditional contracts? - CORRECT 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? - CORRECT ANSWER=> When
the applicant for the policy is not the insured."
"All of the following are TRUE regarding incomplete applications EXCEPT? - CORRECT ANSWER=> The
incomplete application can be accepted with the missing information added later."
"What is a MIB report? - CORRECT ANSWER=> Medical information on an applicant for assessing life or
health insurance risk."
"Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? - CORRECT ANSWER=> Fair Credit Reporting Act"
"All of the following are classifications of risk EXCEPT? - CORRECT ANSWER=> Non-nicotine"
"Which type of receipt makes the insurer liable for the risk from the date of application, regardless of the
applicant's insurability? - CORRECT ANSWER=> Binding receipt"
"If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of
the following EXCEPT? - CORRECT ANSWER=> The treatment procedures that are covered by the
policy."
"How do warranties differ from representations? - CORRECT ANSWER=> A warranty is guaranteed to
be true, a representation is believed to be true to the best of one's knowledge."
"In noncontributory plans, which percentage of eligible members must participate? - CORRECT
ANSWER=> 100%"
"Managed care plans increase efficiency by all of the following means EXCEPT? - CORRECT ANSWER=>
Transferring the management of costs to the insureds."
"All of the following are tax qualified retirement plans EXCEPT? - CORRECT ANSWER=> Section 529
plan."
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PRACTICE EXAM QUESTIONS WITH
DETAILED VERIFIED ANSWERS 100%
CORRECT ANSWERS ALREADY
GRADED A+
"How does a noncancelable policy differ from a guaranteed renewable policy? - CORRECT ANSWER=>
With the noncancelable policy the insurer may increase premiums only based on the terms of the
policy."
"Which of the following refers to how often a premium is paid? - CORRECT ANSWER=> Mode"
"What is the return of premium rider? - CORRECT ANSWER=> An increasing amount of term insurance
that always equals the total of premiums paid up to the current point."
"What does first dollar coverage mean? - CORRECT ANSWER=> As soon as covered medical expenses
are incurred, the policy begins to pay."
"When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during
the policy's initial: - CORRECT ANSWER=> 2 year period"
"All of the following are required signatures on a life insurance application EXCEPT? - CORRECT
ANSWER=> The minor in a juvenile policy."
"What is the purpose of Stranger-originated life insurance (STOLI)? - CORRECT ANSWER=> The policy is
originated primarily or solely for the purpose of resale."
"What procedure 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 a completed application? - CORRECT
ANSWER=> The applicant and possibly the agent initial any changes made."
"What specific new procedures does the USA Patriot Act require of insurance program? - CORRECT
ANSWER=> Establish an anti-money laundering program."
Page | 1
, "Which of the following occurs immediately after the application is submitted and the initial premium
paid? - CORRECT ANSWER=> The underwriting process begins."
"A consumer report used to determine eligibility for insurance may include all of the following EXCEPT? -
CORRECT ANSWER=> Medical Underwriting exam."
"Why are insurance policies considered conditional contracts? - CORRECT 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? - CORRECT ANSWER=> When
the applicant for the policy is not the insured."
"All of the following are TRUE regarding incomplete applications EXCEPT? - CORRECT ANSWER=> The
incomplete application can be accepted with the missing information added later."
"What is a MIB report? - CORRECT ANSWER=> Medical information on an applicant for assessing life or
health insurance risk."
"Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? - CORRECT ANSWER=> Fair Credit Reporting Act"
"All of the following are classifications of risk EXCEPT? - CORRECT ANSWER=> Non-nicotine"
"Which type of receipt makes the insurer liable for the risk from the date of application, regardless of the
applicant's insurability? - CORRECT ANSWER=> Binding receipt"
"If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of
the following EXCEPT? - CORRECT ANSWER=> The treatment procedures that are covered by the
policy."
"How do warranties differ from representations? - CORRECT ANSWER=> A warranty is guaranteed to
be true, a representation is believed to be true to the best of one's knowledge."
"In noncontributory plans, which percentage of eligible members must participate? - CORRECT
ANSWER=> 100%"
"Managed care plans increase efficiency by all of the following means EXCEPT? - CORRECT ANSWER=>
Transferring the management of costs to the insureds."
"All of the following are tax qualified retirement plans EXCEPT? - CORRECT ANSWER=> Section 529
plan."
Page | 2
