FREE PSI Insurance Exam Questions and Answers
Which of the following is taken into account when courts examine a contract to ascertain the parties' intentions? 1. the whole contract; 2. the pertinent sections of the deal; 3. any additions to the main contract; and 4. any words with unclear definitions
When analyzing a contract to ascertain the parties' intentions, the courts take into account the entire document, including any addenda and any words with unclear definitions.
There is an annual dollar limit for tax deductions on a long-term care policy for an individual. This limit is based on which of the following?
An individual long-term care policy's yearly amount cap for tax deductions is determined by the insured's age as of the end of the tax year. Each person's maximum deductible amount is index-based and rises annually to account for inflation.
Which of the following applies most frequently to term life insurance?
A level-term life insurance policy is often one that starts out with little or no insurance coverage.
What is the main benefit of having an existing policy reinstated as opposed to getting a new one? 1. No evidence of insurability is necessary 2. Using original insured issue age 3. No registration is necessary 4. Unpaid loans are forgiven
It is essentially as if a policy has never expired or been canceled when it is reactivated. The policy is reinstated, and the insured is once again protected by the same one that they had prior to it expiring or being canceled.
Which clause in an insurance policy offers the assurance that losses covered by the policy will be paid in exchange for the insured's premium and adherence to the terms of the policy?
The insuring clause is the section of an insurance agreement that guarantees payment of damages covered by the policy in return for the insured's premium and adherence to the terms of the agreement. Most insurance policies begin with the insuring clause. It specifies the extent of the policy's coverage as well as the insurer's financial responsibilities for losses that fall within that range.
Which key distinction between individual and group health insurance exists?
One of the main distinctions between individual and group health insurance is that the former demands proof of insurability, which is generally accurate.
Which must a policy pass to avoid being a MEC?
MECs cover all single-premium insurance. The seven-pay test is a requirement for flexible-premium insurance to avoid MEC designation. The maximum premium that can be paid into a flexible-premium policy over a seven-year period is capped by this test.
Which form of policy allows the policyholder to change the death benefit and is supported by equity investments?
VUL insurance is a kind of permanent life insurance that enables policyholders to put their premium payments into a number of different kinds of investments, including stocks, bonds, and mutual funds. According to their demands, the policyholder can modify the death benefit amount and premium payments. VUL insurance cash value accounts are backed by equity investments.
Which of the following requires a covered employee to consent to a pay cut so that the money can be used to pay for medical costs?
A covered employee accepts a pay cut in a Flexible Spending Account (FSA) so that the money can be used to pay for qualified medical costs.
Which defense time restriction makes the policy incontestable?
After two years, an incontestability clause in a life or disability insurance policy prohibits the insurance company from terminating the coverage due to misstatements in the policy application.
Which policy provision allows the policyowner to have a certain number of days to review the contract and cancel and receive a full refund if they don't like the terms or costs?
Free Look allows the policyowner to review the contract for a set number of days and cancel and receive a full refund if they don't like it. Depending on the state, this provision is normally mandated by law and typically lasts between 10 and 30 days.
If a firm wishes to cover its CEO's life, what form of insurance should it buy?
Key person insurance should be purchased to insure the life of a company's CEO or other key personnel. A firm will obtain key person insurance on the life of an owner, a senior executive, or another person who is important to the company.
Which of the following statements about irrevocable beneficiaries' assignment rights is TRUE?
Regarding assignment rights for irrevocable beneficiaries, the claim that "They are more likely to get a loan based on the expectations of the proceeds" is not always accurate.
Which of the following is a fraternal benefit society?
A non-profit membership organization known as a fraternal benefit society provides life insurance, disability insurance, and/or other related goods. It must be non-profit, sell life, health, and associated insurance products to members, and run charity and other initiatives for members and the public. In addition to helping its members, fraternal benefit organizations sometimes run public and charity initiatives as well.
Which three permanent individual life insurance types are most common?
Whole life, universal life, and variable life are the three most popular types of permanent individual life insurance.
A fixed premium and a guaranteed savings rate are features of whole life insurance. Flexible premiums and market performance-based earnings are features of universal life insurance. Variable life insurance gives the policyholder different ways to invest the savings.
Which of the following in a disability income policy may be viewed as a time deduction rather than a money deduction because benefits are not payable during that time? 1. The phase of eviction 2. The trial period 3. The benefit time frame 4. The grace interval
In a disability income policy, the elimination period may be viewed as a time deduction rather than a monetary deduction because benefits are not paid during that time.