PSI Insurance Exam Practice 4

Question 1

Which life insurance rider allows the policyowner to purchase additional coverage at specified future dates without proving insurability?

Accepted Answer

Guaranteed insurability rider

Answer

The guaranteed insurability (or guaranteed purchase option) rider lets the insured buy more coverage at specific ages or life events without a new medical exam.

Question 2

A homeowners policy's Coverage C—Personal Property typically covers belongings on what basis by default?

Accepted Answer

Actual cash value

Answer

Standard homeowners policies cover personal property on an actual cash value (ACV) basis by default, deducting depreciation from the claim payment.

Question 3

An annuity that begins paying income immediately after a single lump-sum premium is paid is called a(n):

Accepted Answer

Immediate annuity

Answer

An immediate annuity starts income distributions typically within one month of the single premium payment, making it ideal for someone already at retirement.

Question 4

Which of the following best describes a 'surplus lines' insurer?

Accepted Answer

A non-admitted insurer that covers risks the admitted market will not write

Answer

Surplus lines (non-admitted) insurers are not licensed in the state but may legally write coverage for unique or hard-to-place risks through a licensed surplus lines broker.

Question 5

Under workers' compensation, which benefit pays a portion of the injured employee's lost wages during recovery?

Accepted Answer

Temporary total disability benefits

Answer

Temporary total disability (TTD) benefits replace a percentage of the worker's wages while they are completely unable to work but are expected to recover.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Insurance Exam Practice 4