PSI Insurance Exam 5

Question 1

Under COBRA, how long may a qualified beneficiary continue group health coverage after the employee voluntarily terminates employment?

Accepted Answer

18 months

Answer

Most COBRA qualifying events (voluntary termination, reduction in hours) entitle the beneficiary to 18 months of continuation coverage.

Question 2

A homeowner's policy Section II provides which type of coverage?

Accepted Answer

Personal liability and medical payments

Answer

Section II of a homeowner's policy covers personal liability and medical payments to others, protecting against lawsuits from bodily injury or property damage.

Question 3

The maximum amount an insurer will pay for all covered losses under a policy during the policy period is called the:

Accepted Answer

Aggregate limit

Answer

The aggregate limit caps the total amount the insurer will pay for all claims combined during the policy period.

Question 4

A life insurance policy provision that allows the policyowner to reinstate a lapsed policy within a specified period by paying back premiums with interest requires evidence of:

Accepted Answer

Insurability

Answer

Reinstatement provisions require the policyowner to provide evidence of insurability in addition to paying all overdue premiums plus interest.

Question 5

Which nonforfeiture option uses a lapsed whole life policy's cash value to buy a reduced paid-up policy of the same type?

Accepted Answer

Reduced paid-up

Answer

The reduced paid-up nonforfeiture option uses accumulated cash value to purchase a fully paid-up policy with a lower face amount than the original.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Insurance Exam 5