PSI: LIFE, ACCIDENT, AND HEALTH PRACTICE EXAM {ALREADY GRADED A+ } NEWEST VERSION

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PSI: LIFE, ACCIDENT, AND HEALTH

PRACTICE EXAM {ALREADY GRADED

A+ } NEWEST VERSION

Question 1: What does coinsurance mean?

Correct Answer: The insurer and the insured share expenses over the deductible.

Question 2: Which is a disadvantage to a flexible premium annuity?

• The interest rate is fixed forever.
• Withdrawals are never taxed.
• The actual amount of the annuity benefit cannot be determined in advance.
• It requires a single lump-sum payment.

Correct Answer: C) The actual amount of the annuity benefit cannot be determined in advance.Question 3: All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while?

• Committing a felony
• Committing a misdemeanor
• An act of war
• Intentionally self-inflicting an injury

Correct Answer: B) Committing a misdemeanor

Question 4: What is the waiver of premium provision?

Correct Answer: In a long term care contract, the premium is waived after the insured has been confined for a specific period of time.

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Question 5: Whose responsibility is it to make sure that the company is notified of a death claim at the earliest possible opportunity (in most cases)?

Correct Answer: The producer.

Question 6: What happens when the lifetime maximum benefit limit has been reached?Correct Answer: The insured will pay all of the remaining medial costs for as long as the policy is in force.

Question 7: All of the following are non-forfeiture options EXCEPT

• Reduced paid-up insurance.
• Extended term insurance.
• Cash dividend option.
• Cash surrender value.

Correct Answer: C) Cash dividend option.

Question 8: When will a policy pay on a UCR basis?

Correct Answer: When particular benefits are not listed on a payment schedule.

Question 9: Which of the following must be given to the insurer within 20 days after occurrence or commencement of any loss covered by the policy, or as thereafter as is reasonably possible?

• Notice of claim.
• Proof of loss.
• Claim forms.
• Payment of premium.

Correct Answer: A) Notice of claim.

Question 10: Under the misstatement of age or gender provision, what happens if it is determined at death that the insured's age or gender was misstated on a life insurance policy application?

Correct Answer: Benefits are adjusted to an amount that the premium would have

purchased at the correct age or gender.

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Question 11: Under normal conditions which of the following is TRUE for proof of loss when a single loss is claimed?

• The insured has 20 days from the date of loss to provide proof of loss.
• The insured has 60 days from the date of loss to provide proof of loss.
• The insured has 90 days from the date of loss to provide proof of loss.
• The insured has 180 days from the date of loss to provide proof of loss.

Correct Answer: C) The insured has 90 days from the date of loss to provide proof of loss.Question 12: Which one of the following represents an advantage of obtaining a policy loan versus a withdrawal?

• The loan does not incur any interest charges over its lifetime.
• The loan is not taxed while a withdrawal is taxed for amounts above the contract cost

basis.

• A withdrawal is entirely tax-free regardless of the cost basis.
• Withdrawals actually increase the policy's overall death benefit.

Correct Answer: B) The loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis.Question 13: All of the following statements define preexisting conditions EXCEPT?

• A condition diagnosed by a physician before the application.
• Any chronic health condition that presents symptoms and which was unknown at the

time of application.

• An illness manifesting symptoms prior to the effective date.
• A condition treated 3 months prior to the policy start date.

Correct Answer: B) Any chronic health condition that presents symptoms and which was unknown at the time of application.Question 14: Which is the difference between participating and non-participating?Correct Answer: Participating policies pay dividends while non-participating policies do not.Question 15: How does the per capita rule apply to proceeds from a life insurance policy?

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Correct Answer: The proceeds are divided equally among living primary beneficiaries.Question 16: 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.

Question 17: Which of the following refers to how often a premium is paid?

• Deductible
• Coinsurance
• Mode
• Dividend

Correct Answer: C) Mode

Question 18: 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.

Question 19: What does first dollar coverage mean?

Correct Answer: As soon as covered medical expenses are incurred, the policy begins to pay.Question 20: 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

Question 21: All of the following are required signatures on a life insurance application

EXCEPT?

• The applicant.
• The minor in a juvenile policy.
• The agent/producer.
• The insured (if an adult).

Correct Answer: B) The minor in a juvenile policy.

Question 22: What is the purpose of Stranger-originated life insurance (STOLI)?