PSI INSURANCE EXAM QUESTIONS WITH
CORRECT ANSWERS RATED A+
What is it called when a life insurance policy pays a multiple of the coverage amount when
certain types of accidents occur? - CORRECT ANSWERSmultiple indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the
time granted by the insurer, what is the maximum amount of time for reinstatement of the
policy? - CORRECT ANSWERS30 days
Which of the following statements regarding a pure life annuity payout option is correct? -
CORRECT ANSWERSThis option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision in health
insurance policies? - CORRECT ANSWERSfraudulent misstatements
If an individual is insured by both their own health insurance policy and their spouse's policy,
which policy pays first in the event of an illness? - CORRECT ANSWERSThe individual's policy
pays first, the spouse's policy pays the remaining up to coverage amount.
When can the premiums of an individually owned health insurance policy be deducted from the
individual's income tax? - CORRECT ANSWERSwhen the taxpayer's unreimbursed medical
expenses exceed 7.5% of adjusted gross income during a taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered
during the policy's initial - CORRECT ANSWERS2 year period.
Which of the following is a characteristic of Health Maintenance Organizations (HMOs)? -
CORRECT ANSWERSpreventive care
,The life insurance policy will not be truly effective until all of the following occur EXCEPT -
CORRECT ANSWERSthe producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and insured at the
time of application? - CORRECT ANSWERSwhen a third-party applicant names themselves
beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy? - CORRECT
ANSWERSThe cash value earnings are based on the performance of the separate account.
The person who receives the benefit of an annuity is known as the - CORRECT
ANSWERSannuitant.
Which of the following is an example of a premium payment mode? - CORRECT
ANSWERSannual premium payment
How do most disability policies handle the case of a recurrent disability occurring at least 90
days after the first claim? - CORRECT ANSWERSit must be handled as a new claim for a new
period of disability, requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? - CORRECT
ANSWERSRoutine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how
many months from the effective date of the policy? - CORRECT ANSWERS6 months
What does an application for insurance contractually represent for the insured? - CORRECT
ANSWERSan offer
, Which of the following is exempted from the incontestability provision in insurance policies? -
CORRECT ANSWERSfraudulent misstatements
Which of the following may be thought of as a time deductible rather than a dollar deductible in
a disability income policy because benefits are not payable during that time? - CORRECT
ANSWERSelimination period
How long after being entitled to Social Security disability benefits will an individual be eligible to
receive Medicare benefits? - CORRECT ANSWERS2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the
policy will be - CORRECT ANSWERSconsidered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying
investment account? - CORRECT ANSWERSvariable
What is a MIB report? - CORRECT ANSWERSmedical information on an applicant for assessing
life or health insurance risk
Group Life Policies typically include which of the following provisions? - CORRECT
ANSWERSconversion privilege
In a case where an individual's health is insured by both their own policy and their spouse's
policy, which policy pays in the event of an illness? - CORRECT ANSWERSThe individual's policy
pays first, the spouse's policy pays the remaining up to coverage amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is known
as - CORRECT ANSWERSexclusion.
CORRECT ANSWERS RATED A+
What is it called when a life insurance policy pays a multiple of the coverage amount when
certain types of accidents occur? - CORRECT ANSWERSmultiple indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the
time granted by the insurer, what is the maximum amount of time for reinstatement of the
policy? - CORRECT ANSWERS30 days
Which of the following statements regarding a pure life annuity payout option is correct? -
CORRECT ANSWERSThis option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision in health
insurance policies? - CORRECT ANSWERSfraudulent misstatements
If an individual is insured by both their own health insurance policy and their spouse's policy,
which policy pays first in the event of an illness? - CORRECT ANSWERSThe individual's policy
pays first, the spouse's policy pays the remaining up to coverage amount.
When can the premiums of an individually owned health insurance policy be deducted from the
individual's income tax? - CORRECT ANSWERSwhen the taxpayer's unreimbursed medical
expenses exceed 7.5% of adjusted gross income during a taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered
during the policy's initial - CORRECT ANSWERS2 year period.
Which of the following is a characteristic of Health Maintenance Organizations (HMOs)? -
CORRECT ANSWERSpreventive care
,The life insurance policy will not be truly effective until all of the following occur EXCEPT -
CORRECT ANSWERSthe producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and insured at the
time of application? - CORRECT ANSWERSwhen a third-party applicant names themselves
beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy? - CORRECT
ANSWERSThe cash value earnings are based on the performance of the separate account.
The person who receives the benefit of an annuity is known as the - CORRECT
ANSWERSannuitant.
Which of the following is an example of a premium payment mode? - CORRECT
ANSWERSannual premium payment
How do most disability policies handle the case of a recurrent disability occurring at least 90
days after the first claim? - CORRECT ANSWERSit must be handled as a new claim for a new
period of disability, requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? - CORRECT
ANSWERSRoutine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how
many months from the effective date of the policy? - CORRECT ANSWERS6 months
What does an application for insurance contractually represent for the insured? - CORRECT
ANSWERSan offer
, Which of the following is exempted from the incontestability provision in insurance policies? -
CORRECT ANSWERSfraudulent misstatements
Which of the following may be thought of as a time deductible rather than a dollar deductible in
a disability income policy because benefits are not payable during that time? - CORRECT
ANSWERSelimination period
How long after being entitled to Social Security disability benefits will an individual be eligible to
receive Medicare benefits? - CORRECT ANSWERS2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds received under the
policy will be - CORRECT ANSWERSconsidered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying
investment account? - CORRECT ANSWERSvariable
What is a MIB report? - CORRECT ANSWERSmedical information on an applicant for assessing
life or health insurance risk
Group Life Policies typically include which of the following provisions? - CORRECT
ANSWERSconversion privilege
In a case where an individual's health is insured by both their own policy and their spouse's
policy, which policy pays in the event of an illness? - CORRECT ANSWERSThe individual's policy
pays first, the spouse's policy pays the remaining up to coverage amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain risks is known
as - CORRECT ANSWERSexclusion.
