PSI Life Practice exam Questions with Correct Answers

PSI Life Practice exam Questions with Correct Answers

1. all of the following are ownership rights EXCEPT:
g g g g g g g



A: changing the beneficiary of the policy B: borrow
g g g g g g g g



ing funds against cash value
g g g g



C: switching the policy from on insured to another
g g g g g g g g



D: assigning all of the rights of the policy to another person: C: switching the policy from on in
g g g g g g g g g g g g g g g g g g



ured to another g g



2. which of the following is characteristic of a non qualified plan: A: defined
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vesting schedule g



B: plan established by the employer
g g g g g



C: plan does not meet federal guidelines for tax benefits
g g g g g g g g g



D: employer contributions are deductible business expense: C: plan does not meet federal g
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delines for tax benefits g g g



3. How do warranties differ from representations?
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A: a warranty is guaranteed to be true, a representation is believed to be true to the best of o
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ne's knowledge g



B: a representation is guaranteed to be true, a warranty is believed to be true to the best of o
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ne's knowledge g



C: a warranty is issued by the insurer, a representation is a statement provided by the applican
g g g g g g g g g g g g g g g g



D: an incorrect representation automatically voids a contract, whereas an incorrect w
g g g g g g g g g g g



arranty must be proven: A: a warranty is guaranteed to be true, a representation is believe
g g g g g g g g g g g g g g g



d to be true to the best of one's knowledge
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4. in which of the following must a beneficiary change request be filed in writing to th
g g g g g g g g g g g g g g g



e insurer and is made effective by the insurance company: A: designation option
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B: recording method
g g



C: endorsement method
g g



D: succession of beneficiaries: B: recording method
g g g g g g



5. all of the following are required signature on a life insurance application EXCEPT:
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A: the agent
g g



1g/g
17

,B: the applicant
g g



C: the minor in a juvenile policy
g g g g g g



D: the proposed insured: C: the minor in a juvenile policy
g g g g g g g g g g



6. all of the following are features of the spendthrift clause EXCEPT: A: proceeds
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are paid in some other way than a single premium
g g g g g g g g g g



B: proceeds are protected by the insurer from the beneficiary's creditors C: transfer of p
g g g g g g g g g g g g g g



roceeds to creditors g g




2g/g
17

, D:the beneficiary may encumber the proceeds: D:the beneficiary may encumber the proceeds
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7. Which type of annuity attempts to offset inflation by providing a benefit linked to an
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underlying investment account: g g



A: deferred B: fi g g g



xed
C: immediate g



D: variable: D: variable
g g g



8. how does the per capita rule apply to proceeds from a life insurance policy: A: the procee
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ds are divided equally among living primary beneficiaries
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B: the secondary beneficiary receives the proceeds if the primary beneficiary is no longer liv
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ing
C: the proceeds go to the policyholder's estate when no beneficiary is living D: the proceeds
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go to the descendants of the primary beneficiaries: A: the proceeds are divided equally amon
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g living primary beneficiaries
g g g



9. if the insurer wishes to share an applicant's HIV status, the applicant must be given full
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notice of all of the following EXCEPT: g g g g g g



A: insurer's practices with respect to the treatment of this information B: the applica
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nt's right to maintain privacy
g g g g



C: an opportunity to refuse the dissemination of the information
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D: the treatment procedures that are covered by the policy: D: the treatment procedures that
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re covered by the policy
g g g g



10. which of the following is the time limit on certain defenses after which the policy beco
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mes incontestable: g



A: 12 months g g



B: 18 months g g



C: 2 years g g



D: 5 years: C: 2 years
g g g g g



11. why is relying solely on employer group life insurance generally consid-
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gered inadequate for most individual needs:
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A: it is financially insufficient to cover end of life expense: A: it is financially insufficient to cov
g g g g g g g g g g g g g g g g g



r end of life expense
g g g g


3g/g
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