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PSI LIfe Insurance Exam|
latest|COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS
During which period of a Disability Income Policy is coverage effective but during which no benefits will be paid under the policy? - Answer--Probationary period
All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while - Answer--committing a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? - Answer--insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? - Answer--With the noncancelable policy the insurer may increase premiums only based on the terms of the policy.
What does first dollar coverage mean? - Answer--As soon as covered medical expenses are incurred, the policy begins to pay.
Which of the following was specifically designed to address STOLI and IOLI practices? - Answer--NCOIL Act
Which of the following occurs immediately after the application is submitted and the initial premium paid? - Answer--the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of the following EXCEPT - Answer--medical underwriting exam
For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? - Answer--age
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.
In noncontributory plans, which percentage of eligible members must participate? - Answer--100%
When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? - Answer--When the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year
Short term disability insurance generally only covers injuries due to which of the following? - Answer-- Non-occupational injuries
Managed care plans increase efficiency by all of the following means EXCEPT - Answer--transferring the management of costs to the insureds.
Why is rehabilitation considered worthy of federal help under workers' compensation? - Answer--it reduces insurance losses and helps regain the worker's dignity
What type of insurance should a company purchase if it wants to insure the life of its CEO? - Answer-- key person insurance
Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - Answer--Fair Credit Reporting Act
The group conversion option is allowed for all of the following EXCEPT - Answer--during the annual benefits enrollment period
All of the following are tax qualified retirement plans EXCEPT - Answer--Section 529 plan
Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - Answer--It is financially insufficient to cover end of life expenses
Which of the following is characteristic of a nonqualified plan? - Answer--plan does NOT meet federal guidelines for tax benefits
How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? - Answer--2 years
All of the following are requirements to qualify for Social Security disability benefits EXCEPT when - Answer--unable to work in occupation in which the worker was trained or educated.
In a home healthcare benefit, all of the following are eligible expenses EXCEPT - Answer--blood transfusions
Which of the following amends the Social Security Act to make Medicare secondary to group health plans? - Answer--TEFRA
A group conversion option may be used in all the following instances EXCEPT - Answer--a life-changing event, such as marriage, divorce, or childbirth.
Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? - Answer--Disability Income Insurance
All of the following are characteristics of variable whole life EXCEPT - Answer--there is no guaranteed minimum death benefit
Which problem was universal life insurance designed to address? - Answer--low interest rates during periods of high inflation
Which of the following is the most common method to supplement Medicare coverage? - Answer-- coverage offered by private insurers
Which of the following is covered by a dread disease policy? - Answer--illnesses that do not occur frequently but incur significant costs when they do occur
One of the differences between group underwriting an individual underwriting is that there is little or no medical information required regarding plan participants in groups of ` - Answer--50 or more
Which of the following term insurance types provides temporary protection that can be changed to some type of permanent protection without evidence of insurability? - Answer--convertible
Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age? - Answer--renewable term
Which of the following is TRUE of the limited pay whole life policy? - Answer--Coverage continues after the policy is paid-up.
Which one of the following is particularly important for an insurance producer to explain to a client upon delivery of a life insurance policy? - Answer--ANY exclusions
All of the following are ownership rights EXCEPT - Answer--switching the policy from one insured to another
Which of the following is TRUE regarding assignment rights for irrevocable beneficiaries? - Answer--They are MORE likely to receive a loan based on the expectations of the proceeds.
Which type of annuity attempts to offset inflation by providing a benefit linked to an underlying investment account? - Answer--variable
Which part of an insurance contract contains the promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms? - Answer--insuring clause
An insured and the beneficiary are both killed in a fatal accident. Which provision presumes the insured survived the beneficiary? - Answer--common disaster clause
All life insurance and health insurance contracts contain all of the following EXCEPT - Answer-- Representation
Which of the following is common in an increasing term life policy? - Answer--it begins with little or no insurance protection
Which of the following is the time limit on certain defenses after which the policy becomes incontestable? - Answer--2 years
Which whole life policy premium type is the most common? - Answer--continuous premium
In a level term life policy, which ALWAYS remains constant? - Answer--death benefit
Which of the following lists the three common types of permanent individual life insurance? - Answer-- Variable Life, Whole Life, Universal Life
Which of the following refers to how often a premium is paid? - Answer--mode
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
Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? - Answer-- prearranged costs for services rendered
In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses? - Answer--Flexible Spending Account (FSA)
Which of the following policy types is considered double indemnity? - Answer--accidental death
Which of the following is TRUE for a flexible premium annuity? - Answer--The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount.
Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? - Answer--major medical insurance
All of the following are characteristics of COBRA EXCEPT - Answer--change in medical privacy procedures
In order to AVOID being classified as an MEC, a policy must pass which of the following? - Answer--7-Pay Test
