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PSI LIFE INSURANCE EXAM ACTUAL PREP
QUESTIONS AND WELL REVISED ANSWERS -
LATEST AND COMPLETE UPDATE WITH
VERIFIED SOLUTIONS – ASSURES PASS
During which period of a Disability Income Policy is coverage effective but during
which no benefits will be paid under the policy? - ANSWER: Probationary period
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER: committing a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than
obtaining a new one? - ANSWER: insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? -
ANSWER: With the noncancelable policy the insurer may increase premiums
only based on the terms of the policy.
What does first dollar coverage mean? - ANSWER: As soon as covered medical
expenses are incurred, the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against
the insurer after written proof of loss is provided? - ANSWER: 3 years
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What is a MIB report? - ANSWER: medical information on an applicant for
assessing life or health insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT -
ANSWER: the incomplete application can be accepted with the missing
information added later.
Why are insurance policies considered conditional contracts? - 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? -
ANSWER: when the applicant for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of
application, regardless of the applicant's insurability? - ANSWER: binding receipt
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER: Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER:
he policy originated primarily or solely for the purpose of resale.
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How do warranties differ from representations? - ANSWER: a warranty is
guaranteed to be true, a representation is believed to be true to the best of one's
knowledge.
Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER: Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI
practices? - ANSWER: NCOIL Act
Which of the following occurs immediately after the application is submitted and
the initial premium paid? - ANSWER: the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT - ANSWER: medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following? - ANSWER: age
PSI LIFE INSURANCE EXAM ACTUAL PREP
QUESTIONS AND WELL REVISED ANSWERS -
LATEST AND COMPLETE UPDATE WITH
VERIFIED SOLUTIONS – ASSURES PASS
During which period of a Disability Income Policy is coverage effective but during
which no benefits will be paid under the policy? - ANSWER: Probationary period
All of the following are common exclusions from loss found in disability income
policies EXCEPT for that incurred while - ANSWER: committing a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than
obtaining a new one? - ANSWER: insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? -
ANSWER: With the noncancelable policy the insurer may increase premiums
only based on the terms of the policy.
What does first dollar coverage mean? - ANSWER: As soon as covered medical
expenses are incurred, the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against
the insurer after written proof of loss is provided? - ANSWER: 3 years
,2|Page
What is a MIB report? - ANSWER: medical information on an applicant for
assessing life or health insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT -
ANSWER: the incomplete application can be accepted with the missing
information added later.
Why are insurance policies considered conditional contracts? - 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? -
ANSWER: when the applicant for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of
application, regardless of the applicant's insurability? - ANSWER: binding receipt
What specific new procedures does the USA Patriot Act require of insurance
companies? - ANSWER: Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER:
he policy originated primarily or solely for the purpose of resale.
, 3|Page
How do warranties differ from representations? - ANSWER: a warranty is
guaranteed to be true, a representation is believed to be true to the best of one's
knowledge.
Obtaining consumer information reports under false pretenses is prosecutable by
which of the following? - ANSWER: Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI
practices? - ANSWER: NCOIL Act
Which of the following occurs immediately after the application is submitted and
the initial premium paid? - ANSWER: the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of
the following EXCEPT - ANSWER: medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax
deductions that is based on which of the following? - ANSWER: age
