PSI Knowledge Exam 5

Question 1

What is 'insurable interest' in the context of life insurance?

Accepted Answer

A financial or emotional stake in the continued life of the insured at the time of application

Answer

Insurable interest means the policyholder must have a legitimate financial or personal stake in the insured's continued life, which is required at the time the policy is issued.

Question 2

A 'mechanic's lien' can be filed against a property by:

Accepted Answer

Contractors, subcontractors, or suppliers who have not been paid for work or materials

Answer

Mechanic's liens allow contractors, subcontractors, and material suppliers who have not been paid to place a legal claim against the improved property as security for payment.

Question 3

Under the Fair Housing Act, which of the following is a protected class?

Accepted Answer

National origin

Answer

The federal Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, disability, and familial status; national origin is explicitly protected.

Question 4

When an insured intentionally causes a loss, an insurer can deny the claim based on which policy provision?

Accepted Answer

The concealment and fraud exclusion

Answer

Insurance policies exclude coverage for intentional acts or fraud, so a claim arising from a deliberate loss by the insured can be denied under the concealment and fraud exclusion.

Question 5

In a real estate transaction, 'earnest money' is best described as:

Accepted Answer

A good-faith deposit made by the buyer to demonstrate intent to purchase

Answer

Earnest money is a deposit provided by the buyer when submitting an offer to show serious intent to purchase; it is typically applied toward the purchase price at closing.

PSI - Exams Practice Test

PSI - Exams Practice Test

PSI Knowledge Exam 5