PSI Insurance Exam 3

Question 1

A property insurance concept that prevents an insured from collecting more than the actual financial loss sustained is called the principle of:

Accepted Answer

Indemnity

Answer

The principle of indemnity states that insurance should restore the insured to the same financial position as before the loss, not better.

Question 2

Which Medicare supplement plan is standardized and covers the Medicare Part A deductible?

Accepted Answer

Plan B

Answer

Medigap Plan B covers the Medicare Part A hospital deductible in addition to the basic benefits included in all Medigap plans.

Question 3

An insurer that is incorporated in the state where it is doing business is called a:

Accepted Answer

Domestic insurer

Answer

A domestic insurer is one that is incorporated and chartered in the same state where it sells insurance.

Question 4

The Workers' Compensation law requires employers to provide benefits for employees injured:

Accepted Answer

In the course and scope of employment

Answer

Workers' compensation is a no-fault system covering injuries arising out of and in the course of employment, regardless of employer negligence.

Question 5

A universal life insurance policy's death benefit option that keeps the face amount level while cash value changes is called:

Accepted Answer

Option A (Level death benefit)

Answer

Under universal life Option A, the total death benefit remains level, so as cash value grows the net amount at risk decreases.

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