PSI EXAM QUESTIONS AND ANSWERS
(2022/2023) (VERIFIED SOLUTIONS)
During which period of a Disability Income Policy is coverage effective but during which no
benefits will be paid under the policy? ✔✔Probationary period
...
PSI EXAM QUESTIONS AND ANSWERS
(2022/2023) (VERIFIED SOLUTIONS)
During which period of a Disability Income Policy is coverage effective but during which no
benefits will be paid under the policy? ✔✔Probationary period
All of the following are common exclusions from loss found in disability income policies
EXCEPT for that incurred while ✔✔commiting a misdemeanor
What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a
new one? ✔✔insured original issue age is used
How does a noncancelable policy differ from a guaranteed renewable policy? ✔✔With the
noncancelable policy the insurer may increase premiums only based on the terms of the policy.
What does first dollar coverage mean? ✔✔As soon as covered medical expenses are incurred,
the policy begins to pay.
What is the maximum amount of time the insured has to file legal action against the insurer after
written proof of loss is provided? ✔✔3 years
What is a MIB report? ✔✔medical information on an applicant for assessing life or health
insurance risk
All of the following are TRUE regarding incomplete applications EXCEPT ✔✔the incomplete
application can be accepted with the missing information added later.
hy are insurance policies considered conditional contracts? ✔✔Certain conditions need to be met
to make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? ✔✔when the applicant
for the policy is not the insured
Which type of receipt makes the insurer liable for the risk from the date of application,
regardless of the applicant's insurability? ✔✔binding receipt
What specific new procedures does the USA Patriot Act require of insurance companies?
✔✔Establish an anti-money laundering program
What is the purpose of Stranger-originated life insurance (STOLI)? ✔✔he policy is originated
primarily or solely for the purpose of resale
How do warranties differ from representations? ✔✔a warranty is guaranteed to be true, a
representation is believed to be true to the best of one's knowledge.
Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? ✔✔Fair Credit Reporting Act
Which of the following was specifically designed to address STOLI and IOLI practices?
✔✔NCOIL Act
Which of the following occurs immediately after the application is submitted and the initial
premium paid? ✔✔the underwriting process begins
A consumer report used to determine eligibility for insurance may include all of the following
EXCEPT ✔✔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? ✔✔age
Under which situation must insurable interest exist between the applicant and insured at the time
of application? ✔✔When a third-party applicant names themselves beneficiary.
In noncontributory plans, which percentage of eligible members must participate? ✔✔100%
When can the premiums of an individually owned health insurance policy be deducted from the
individual's income tax? ✔✔hen the taxpayer's medical expenses exceed 7.5% of adjusted gross
income during a taxable year
Short term disability insurance generally only
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