PSI Knowledge Exam 2

Question 1

Which type of insurance policy pays a death benefit only if the insured dies within a specified period?

Accepted Answer

Term life

Answer

Term life insurance provides coverage for a set period and pays a death benefit only if the insured dies during that term.

Question 2

In real estate, what does 'escrow' refer to?

Accepted Answer

A neutral third-party account holding funds during a transaction

Answer

Escrow is a neutral account managed by a third party that holds funds and documents until all conditions of a real estate transaction are met.

Question 3

A contractor who performs work without a required state license may face which consequence?

Accepted Answer

Civil penalties and inability to enforce contracts

Answer

Unlicensed contractors can face civil fines and may be barred from pursuing legal remedies to collect payment for their work.

Question 4

What is the purpose of a 'deductible' in an insurance policy?

Accepted Answer

The portion of a loss the policyholder must pay before insurance kicks in

Answer

A deductible is the out-of-pocket amount the insured must pay before the insurance company begins covering the remaining loss.

Question 5

Under most state real estate laws, dual agency occurs when a licensee represents:

Accepted Answer

Both the buyer and seller in the same transaction

Answer

Dual agency means a single agent or brokerage represents both the buyer and the seller in the same real estate transaction, requiring disclosure and consent.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Knowledge Exam 2