FREE PSI Insurance Exam Practice Questions and Answers
Consideration, acceptance, and offer are all required elements of?
A contract is made up of three main parts: an offer, an acceptance, and consideration There is no legally binding agreement until all three of these things are in place.
Most premiums for whole life insurance are:
Whole life premiums are fixed. The policy's minimum guaranteed cash value and set death benefit are provided by the fixed premiums.
Basic whole life insurance includes ALL of the following EXCEPT:
Whole life insurance is available in three basic types: continuous premium, limited payment, and single premium. Interim term insurance is designed as a stepping stone for customers who want to buy permanent coverage and lasts for one year or less.
All of the following characteristics of a single premium whole life insurance EXCEPT:
A single premium whole life insurance policy has a fixed face amount.
A qualified plan is which of the following?
A qualifying plan known as a 401(k) allows employees to choose to have their company contribute a percentage of their income to an individual account under the plan.
Which policy is double indemnity?
A clause in a life insurance policy called "double indemnity" says that if the insured person dies in an accident, the insurance company will pay out twice as much money as the standard life insurance contract says it will.
Living benefits are provided by which life insurance?
Living benefits from whole life insurance include cash values and policy loans.
Under a personal policy, someone insured who CANNOT perform the tasks of his or her own occupation for a specified length of time is?
People who become disabled and are unable to conduct out most of the occupational responsibilities for which they have been trained are covered by an own-occupation insurance policy. This kind of insurance coverage is dependent upon the person being employed when the disability arises.
A potential insured wants to buy a policy that would offer the HIGHEST level of protection for a brief period of time during which the insured will have few financial resources. Which of the following types of insurance should the agent suggest the potential insured to purchase?
The most comprehensive protection would be offered by term insurance for a limited duration. A renewable term policy can be renewed at the insured's discretion.
What's a non-qualified annuity's tax advantage?
You do not have to pay income taxes until you take money out or start receiving payments since annuities grow tax deferred. If you used pre-tax money to buy the annuity, the money will be taxed as income when you withdraw it.
Which of the following about the cash value of an ordinary whole life policy is not true?
At maturity, unpaid policy loans are subtracted from the death benefit of the policy.
What's guaranteed with a straight life policy?
The insurer guarantees both the death benefit and the cash value.
What happens when a life insurance policy's cash value matches its face value?
A life insurance policy endows, or pays out, when the cash value reaches the face value. Life insurance cannot endow before the insured's 95th birthday.
A limited payment life insurance policy has all of the same characteristics as a straight life insurance policy, with the exception of:
Limited payment life insurance policies have shorter premium-paying periods than straight life policies.
Business partners buying life insurance on each other?
In this form of arrangement, company partners obtain key person life insurance policies on each other to keep the firm operating or buy out the deceased partner's family.
This life insurance policy protects the insured against death for the rest of his or her life, but premiums are not paid for the whole time.
Life insurance cover is provided by restricted payment whole life plans for the duration of the insured's life, but only after 20- or 25-years' worth of premium payments have been made.