Exam (elaborations)
PSI INSURANCE EXAM 2024
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PSI INSURANCE EXAM 2024
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PSI INSURANCE EXAM 2024What is it called when a life insurance policy pays a multiple of the coverage amount
when certain types of accidents occur? - ANSWER multiple indemnity
Upon the issuance of a conditional receipt for a renewal when the premium is paid
AFTER the time granted by the insurer, what is the maximum amount of time for
reinstatement of the policy? - ANSWER 30 days
Which of the following statements regarding a pure life annuity payout option is
correct? - ANSWER This option provides the highest monthly income.
Which of the following does not apply to the time limit on certain defenses provision
in health insurance policies? - ANSWER fraudulent misstatements
If an individual is insured by both their own health insurance policy and their
spouse's policy, which policy pays first in the event of an illness? - ANSWER The
individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
When can the premiums of an individually owned health insurance policy be
deducted from the individual's income tax? - ANSWER when the taxpayer's
unreimbursed medical expenses exceed 7.5% of adjusted gross income during a
taxable year
When the suicide clause is inserted in a life insurance contract, death by suicide is
not covered during the policy's initial - ANSWER 2 year period.
Which of the following is a characteristic of Health Maintenance Organizations
(HMOs)? - ANSWER preventive care
The life insurance policy will not be truly effective until all of the following occur
EXCEPT - ANSWER the producer has explained the policy to the client.
Under which situation must insurable interest exist between the applicant and
insured at the time of application? - ANSWER when a third-party applicant names
themselves beneficiary
Which of the following is a distinguishing feature of a variable life insurance policy? -
ANSWER The cash value earnings are based on the performance of the separate
account.
The person who receives the benefit of an annuity is known as the - ANSWER
annuitant.
Which of the following is an example of a premium payment mode? - ANSWER
annual premium payment
,How do most disability policies handle the case of a recurrent disability occurring at
least 90 days after the first claim? - ANSWER it must be handled as a new claim for
a new period of disability, requiring a new elimination period.
Which of the following is true for most comprehensive dental policies? - ANSWER
Routine care is provided without coinsurance or deductibles.
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded
after how many months from the effective date of the policy? - ANSWER 6 months
What does an application for insurance contractually represent for the insured? -
ANSWER an offer
Which of the following is exempted from the incontestability provision in insurance
policies? - ANSWER fraudulent misstatements
Which of the following may be thought of as a time deductible rather than a dollar
deductible in a disability income policy because benefits are not payable during that
time? - ANSWER elimination period
How long after being entitled to Social Security disability benefits will an individual be
eligible to receive Medicare benefits? - ANSWER 2 years
If a policy is determined to be a Modified Endowment Contract (MEC), funds
received under the policy will be - ANSWER considered taxable income first.
Which type of annuity attempts to offset inflation by providing a benefit linked to an
underlying investment account? - ANSWER variable
What is a MIB report? - ANSWER medical information on an applicant for
assessing life or health insurance risk
Group Life Policies typically include which of the following provisions? - ANSWER
conversion privilege
In a case where an individual's health is insured by both their own policy and their
spouse's policy, which policy pays in the event of an illness? - ANSWER The
individual's policy pays first, the spouse's policy pays the remaining up to coverage
amount.
The feature of a Life Insurance Policy stating that the policy will NOT cover certain
risks is known as - ANSWER exclusion.
The primary purpose of Health Reimbursement Accounts (HRAs) is to assist -
ANSWER covered employees with the payment of medical expenses on a high
deductible plan funded through pre-tax contributions.
What type of insurance should a company purchase if it wants to insure the life of its
CEO? - ANSWER key person insurance
, Which is the major reason why long term care insurance is becoming increasingly
important? - ANSWER As life expectancy increases, the chances of needing long
term care also increase.
Which of the following requires the claim information to be submitted to the insurer
prior to treatment to determine whether the treatment is covered and how much the
insured's plan will pay? - ANSWER precertification provision
Which policy provision permits the policyowner to take a specified number of days to
examine the contract, and allows for cancellation and a full refund if the policyowner
rejects the terms or costs? - ANSWER free look
A life insurance policy may be returned for cancellation and full refund if it is returned
NO later than - ANSWER 20 days after receipt by the policyholder.
Which of the following features makes Universal Life Insurance different from other
forms of Whole Life Insurance? - ANSWER premium schedules
Which of the following is TRUE in a key employee life insurance policy? - ANSWER
The corporation is the applicant and policy holder. The employee is the insured.
How are issues of ambiguity usually resolved because insurance contracts are
contracts of adhesion? - ANSWER in favor of the insured because the insurance
company drafts the language in the contract
Which of the following is a characteristic of indexed universal life insurance? -
ANSWER A portion of the cash value is tied to an equity index account linked to a
stipulated stock index.
Managed care plans increase efficiency by all of the following means EXCEPT -
ANSWER transferring the management of costs to the insureds.
Which type of policy allows the policyowner the option to change the face value,
amount of premium, length of coverage, and type of coverage without changing
policies? - ANSWER adjustable life
Which of the following policy loans is a provision in which an amount equal to the
premium due is subtracted from the cash value to pay the premium and prevent a
lapse of the policy? - ANSWER automatic premium loan
All of the following are ownership rights EXCEPT - ANSWER switching the policy
from one insured to another
Which of the following describes a jumping juvenile policy? - ANSWER The face
amount increases up to five times the original face amount when the insured reaches
a specified age.
All of the following are required signatures on a life insurance application EXCEPT -
ANSWER the minor in a juvenile policy.
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