PSI Insurance Exam Practice 3

Question 1

A commercial general liability (CGL) policy written on a 'claims-made' basis covers claims:

Accepted Answer

Only if the injury occurs and is reported during the policy period

Answer

A claims-made policy covers claims that are both made (reported) during the active policy period, making the reporting date critical.

Question 2

The 'incontestability clause' in a life insurance policy prevents the insurer from voiding the policy for misrepresentation after:

Accepted Answer

2 years

Answer

After the incontestability period (typically 2 years), the insurer cannot contest the policy's validity based on misstatements in the application.

Question 3

Which auto insurance coverage pays for the insured's own vehicle damage when colliding with another object?

Accepted Answer

Collision

Answer

Collision coverage pays for damage to the insured's vehicle resulting from impact with another vehicle or object, regardless of fault.

Question 4

A person who is licensed to sell insurance and represents the insured rather than the insurance company is called a(n):

Accepted Answer

Broker

Answer

A broker represents the insurance buyer (insured) and shops the market on their behalf, owing fiduciary duty to the client rather than to any one insurer.

Question 5

Under the Social Security definition used in many disability income policies, total disability means the inability to perform:

Accepted Answer

Any occupation for which the insured is reasonably suited

Answer

Social Security's strict definition of disability requires the inability to engage in any substantial gainful activity due to a medically determinable condition expected to last at least 12 months or result in death.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Insurance Exam Practice 3