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PSI life, Accident, and Health Exam
Questions with Correct Answers
How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? A. immediately B. 1 year C. 2 years D. At age 65 - ANSWER-2 years What is the return of premium rider? A. an increasing amount of term insurance that always equals the total of premiums paid up to the current point B. a provision that allows the insured to cancel the policy in the first two years and have premiums refunded C. an increasing amount of term insurance that equals the cash value of the policy at any point in time D. a provision that states the insurer must return any premiums paid during the free-look period - ANSWER-an increasing amount of term insurance that always equals the total of premiums paid up to the current point In a home healthcare benefit, all of the following are eligible expenses EXCEPT A. intermittent part-time nursing care; B. physical, occupational, or speech therapy; C. blood transfusions D. medical social services; - ANSWER-blood transfusions
All of the following are classifications of risk EXCEPT A. substandard B. preferred C. declined D. non-nicotine - ANSWER-non-nicotine Which of the following is exempted from the incontestability provision in insurance policies? A. fraudulent misstatements B. pre- existing conditions C. change in health D. changes in the insurance code - ANSWER-fraudulent misstatements A group conversion option may be used in all the following instances EXCEPTthe termination of the master policy. A. loss of coverage due to loss of employment. B. loss of eligibility on the part of a class of insureds. C. a life-changing event, such as marriage, divorce, or childbirth. - ANSWER-a life- changing event, such as marriage, divorce, or childbirth. Which of the following is characteristic of a non-qualified plan? A. defined vesting schedule B. plan established by the employer C. plan does not meet federal guidelines for tax benefits D. employer contributions are deductible business expenses - ANSWER-plan does not meet federal guidelines for tax benefits
C. Report large transactions by charitable organizations D. To take action against employees for failure to implement the Act. - ANSWER- Establish an anti-money laundering program A consumer report used to determine eligibility for insurance may include all of the following EXCEPT A. character. B. reputation. C. credit information. D. medical underwriting exam. - ANSWER-medical underwriting exam. All of the following are TRUE regarding incomplete applications EXCEPT A. the underwriting department will return the application to the agent. B. the applicant will have to wait additional time before coverage begins. C. there will be a delay in the underwriting process. D. the incomplete application can be accepted with the missing information added later.
- ANSWER-the incomplete application can be accepted with the missing information added later. Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? A. medicaid insurance B. major medical insurance C. supplemental medical insurance D. long term care insurance - ANSWER-major medical insurance
Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility? A. accelerated benefits rider B. assisted living rider C. terminal illness rider D. long term care rider - ANSWER-long term care rider All of the following are characteristics of COBRA EXCEPT A. qualifying events. B. notification statements. C. continuation of coverage. D. change in medical privacy procedures. - ANSWER-change in medical privacy procedures. What type of insurance should a company purchase if it wants to insure the life of its CEO? A. key person insurance B. BOE insurance C. group life policy D. industrial life insurance - ANSWER-key person insurance Which of the following is true about a decreasing term life policy? A. The cash value of the policy decreases over time. B. The face amount reaches zero at policy expiration. C. Premiums decrease over time but the amount of coverage remains constant.
mode? A. annual premium payment B. payment by check C. automatic deduction of premium D. $200 per policy year - ANSWER-annual premium payment What is the waiver of premium provision? A. In a long term care contract, the premium is waived after the insured has been confined for a specific period of time. B. In a life insurance policy, the insured may request a waiver of premium during times of financial hardship. C. In a disability policy, the premium is waived after the insurance benefit period has been passed D. In a health insurance policy, the premium is waived after the maximum out of pocket has been paid by the insured. - ANSWER-In a long term care contract, the premium is waived after the insured has been confined for a specific period of time. Which of the following amends the Social Security Act to make Medicare secondary to group health plans? A. ADEA B. ERISA C. OBRA D. TEFRA - ANSWER-TEFRA When will a policy pay on a UCR (Usual, Customary, Reasonable) basis? A. When particular benefits are not listed on a payment schedule B. When a surgical procedure is not pre-approved by the insurer C. When the provider charges a different amount than is listed on the payment
schedule D. When the treatment is received in a different geographic area than where the insured lives - ANSWER-When particular benefits are not listed on a payment schedule Which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? A. the loan is subtracted from the death benefit and does not require payments B. the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis C. the loan originates from the insurance company, whereas the withdrawal comes from the policy D. the interest on the loan does not have to be paid if the insured dies before the loan is paid in full. - ANSWER-the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis The group conversion option is allowed for all of the following EXCEPT A. termination of the master policy. B. loss of group coverage due to termination of employment. C. upon the loss of eligibility on the part of a class of insureds. D. during the annual benefits enrollment period. - ANSWER-during the annual benefits enrollment period. Which is the primary purpose of Health Reimbursement Accounts (HRAs)? A. To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions. B. To assist covered employees on standard group health insurance plans by using post tax contributions to fund an account to pay medical expenses. C. To assist employees who work for small companies to pay medical expenses on
Current assumption whole life policies are sensitive to which of the following? A. interest rates B. age of the insured C. health of the insured D. current cash value of the policy - ANSWER-interest rates All of the following are requirements to qualify for Social Security disability benefits EXCEPT when A. credited with the appropriate number of quarters of coverage. B. total and permanent disabled for at least 5 months. C. disability expected to last for 12 months or end in death. D. unable to work in occupation in which the worker was trained or educated. - ANSWER-unable to work in occupation in which the worker was trained or educated. 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? A. Only the individual's policy pays. B. Both policies pay the full amount. C. The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. D. The policy that was purchased first pays first, the second policy pays the remaining up to coverage amount. - ANSWER-The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. Which of the following is TRUE for a flexible premium annuity?
A. The actual amount of the annuity benefit is determined in advance. B. A single set amount premium is paid by the annuitant on an annual basis. C. The company promises to pay the annuitant an amount each period beginning after a single lump sum payment. D. The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. - ANSWER-The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. What is the purpose of Stranger-originated life insurance (STOLI)? A. the policy is originated primarily or solely for the purpose of resale B. the policy is written so as to avoid proof of insurable interest C. it is a method of insuring a person who has been previously declined. D. it is a fraudulent policy meant for financial gain of someone unknown to the insured. - ANSWER-the policy is originated primarily or solely for the purpose of resale Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses? A. Deductible B. Stop Loss Limit C. Maximum Benefit
annuity B. Life annuity C. Survivorship life annuity D. Temporary annuity - ANSWER-Joint life annuity Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? A. prearranged costs for services rendered B. providers receive a flat monthly amount for each user C. ability to receive care at the same cost from any provider D. emergency treatment is restricted to pre-selected hospitals - ANSWER- prearranged costs for services rendered When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing the applicant a summary of coverage that includes all of the following EXCEPT A. a detailed and comprehensive summary of the accelerated benefit B. definitions of the conditions or occurrences triggering payment of the benefit C. an explanation of any effects an accelerated benefit on the cash value, death benefit, premium payments, and loans.
D. a statement that benefit payments may adversely affect eligibility for Medicaid - ANSWER-a detailed and comprehensive summary of the accelerated benefit When does insurable interest come into play in a life insurance policy? A. when the applicant for the policy is not the insured B. when a charity is named beneficiary of the policy C. when a beneficiary is irrevocable D. when the free look period ends - ANSWER-when the applicant for the policy is not the insured Which of the following was specifically designed to address STOLI and IOLI practices? A. NOIL Act B. Fair Credit Reporting Act C. State Insurance Statutes D. HIPAA - ANSWER-NOIL Act The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policyowner UNLESS which of the following is true? A. The policyowner has named an irrevocable beneficiary. B. The policyowner has named a revocable beneficiary. C. The policyowner deems the beneficiary unfit. D. The insurer prohibits changes to beneficiaries. - ANSWER-The policyowner has named an irrevocable beneficiary. Which of the following occurs immediately after the application is submitted and the initial premium paid?
A. a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. B. a representation is guaranteed to be true, a warranty is believed to be true to the best of one's knowledge. C. a warranty is issued by the insurer, a representation is a statement provided by the applicant. D. an incorrect representation automatically voids a contract, whereas an incorrect warranty must be proven. - ANSWER-a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. Which of the following policy types is considered double indemnity? A. accidental death B. key employee C. term life D. whole life - ANSWER-accidental death What does coinsurance mean? A. The insurer and the insured share ALL expenses. B. The insurer and the insured share expenses over the deductible. C. A policy covers the insured and any additional named persons. D. The policyowner holds multiple policies through the same insurer. - ANSWER-The insurer and the insured share expenses over the deductible. 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? A. 10 days
B. 30 days C. 45 days D. 60 days - ANSWER-45 days Which is the major reason why long-term care insurance is becoming increasingly important? A. It is easy to make a profit from investing in long term care B. As life expectancy increases, the chances of needing long term care also increase C. Nursing homes only accept Medicare as a secondary insurance source. D. Many younger people are developing life-threatening conditions and require hospice care. - ANSWER-As life expectancy increases, the chances of needing long term care also increase Which of the following refers to how often a premium is paid? A. Level B. Mode C. Net D. Ratio - ANSWER-Mode
Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? A. It is financially insufficient to cover end of life expenses. B. It is meant to cover funeral expenses only. C. It does not pay off the insured's mortgage. D. It is based on salary amounts that are too low. - ANSWER-It is financially insufficient to cover end of life expenses. What is the primary advantage for obtaining a reinstatement of a policy rather than obtaining a new one? A. No proof of insurability is required B. insured original issue age is used C. No application is required D. outstanding loans are cancelled - ANSWER-insured original issue age is used In noncontributory plans, which percentage of eligible members must participate? A. 0% B. 50% C. 75% D. 100% - ANSWER-100%
When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? A. when the taxpayer's medical expenses exceed 5.0% of adjusted gross income during a taxable year B. when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year C. any taxpayer who itemizes deductions may deduct their health insurance premiums D. never because only group owned health insurance premiums may be deducted. - ANSWER-when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year All of the following are characteristics of variable whole life EXCEPT A. the premium is level B. there is no guaranteed cash value C. there is no guaranteed minimum death benefit. D. the agent must be licensed in both insurance and securities. - ANSWER-there is no guaranteed minimum death benefit. 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? A. Whole life B. Variable life C. Flexible term D. Renewable term - ANSWER-Renewable term Under which situation must insurable interest exist between the applicant and insured at the time of application?
