PSI testing questions

Annuitant

When an annuity is written, whose life expectancy is taken into account?

Whole life

Which of the following types of insurance policies would perform the function of cash accumulation?

Tort

What is a wrongful act or the violation of someone's rights that leads to legal liability called?

Actuarial

Which of the following departments is responsible for developing mortality and morbidity tables?

A STOLI policy.

An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of

Ask questions that are not on the application but that are important for underwriting.

During a pre-selection interview, an agent is allowed to do all of the following EXCEPT

The benefit is received tax free.

A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then

Consideration

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Insuring clause

Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?

Contributions are tax exempt

All of the following statements are true of a nonqualified retirement plan EXCEPT

Until the beneficiary's death

How long will the beneficiary receive payments under the single life settlement option?

Modified endowment contract.

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an

Life insurance proceeds

Kayla's husband died in a plane crash. She needs a new source of funding that will help put her child through daycare. Which of the following would be the best source?

Enforces the execution of all provisions and laws.

The Commissioner performs all of the duties dictated by the CIC and

Rate

The price of insurance for each exposure unit is known as

Entire contract.

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the

The beneficiary must have insurable interest in the insured

Which is NOT true about beneficiary designations?

Jumping juvenile policy

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?

Are tax deductible.

In general terms, IRA contributions

The annuitant cannot be the same person as the annuity owner.

Which of the following is NOT true regarding the annuitant?

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit?

Surrender charge

A fee charged to the insured when a policy or annuity is exchanged for its cash value is

Costs of training a replacement

A key person insurance policy can pay for which of the following?

Family maintenance

A policy which pays monthly income upon the death of the breadwinner for a predetermined number of years after death, plus a lump sum at death, and combines level term and whole life is known as which policy?

Legal hazard.

A set of legal or regulatory conditions that affect an insurer's ability to collect premiums commensurate with the level of risk incurred would be considered a(n):

Pure risk.

A situation in which a person can only lose or have no change represents

Business overhead expense policy

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?

The interest is not taxable since it remains inside the insurance policy.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

Specified.

All of the following are beneficiary designations EXCEPT

Are subject to vesting requirements

Employer contributions made to a qualified plan

Loss

Insurance is a contract by which one seeks to protect another from

Spouse

An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable?

$30,000

An insurer has been found guilty of a Code violation regarding replacement. The insurer then repeats the violation. What will be the minimum penalty?

June 30th

An insurer received a claim on May 1st. On May 31th, the claim was approved in its entirety. By what date can the claimant expect the payment?

Guaranteed insurability.

At the time the insured purchased her life insurance policy, she added a rider that will allow her to purchase additional insurance in the future without having to prove insurability. This rider is called

Restores an insured person to the same financial state as before the loss.

In case of a loss, the indemnity provision in insurance policies

Are considered true to the best of the applicant's knowledge.

Representations are written or oral statements made by the applicant which

Incontestability clause.

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the

Cash surrender

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Family Income Policy

W owns a policy in which she is covered as the bread-winner with permanent insurance and with decreasing term insurance in the form of a rider. What type of policy is this?

They are usually qualified plans.

Which of the following statements regarding deferred compensation funds is INCORRECT?

Independent agent

Which of the following persons represents several insurance companies but owns the records of the policies sold?

A sign in an insurer's office

Which of the following would NOT be considered a form of direct response marketing?

Creditor

Which of the following would be the beneficiary in credit life insurance?

Face amount

Which policy component decreases in decreasing term insurance?

Dividends are considered a refund of unused premiums.

Your client wants to buy a par policy to supplement his retirement savings program. Which of the following does your client need to understand about insurance policy dividends?

Return the application to the applicant for a signature.

If an agent fails to obtain an applicant's signature on the application, the agent must

Unilateral

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

A family

The legal definition of "person" would NOT include which of the following?

Signed waiver of premium.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT

Guaranteed lifetime Withdrawal

Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity?

The beneficiary

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

Flexible premium.

Both Universal Life and Variable Universal Life have a

They can convert their coverage to permanent life insurance without evidence of insurability.

When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?

Estimated longevity

Which of the following is NOT a type of information that needs to be gathered in order to determine the value of someone's life when using the needs approach?

Welfare benefits.

All of the following benefits are available under Social Security EXCEPT

It is a life contingency option.

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT

30 days after issuance of license.

An insurer, by filing a notice of appointment on behalf of an applicant, shall be deemed to have declared that the applicant has had experience or instruction in insurance or that the necessary instruction will be given within

Employees.

For a retirement plan to be qualified, it must be designed for the benefit of

Fire and Casualty

The insurance solicitor is only found in which field of insurance?

Waiver of premium.

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Cash value

What limits the amount that a policyowner may borrow from a whole life insurance policy?

Concealment

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Only the annuity owner

Which of the following can surrender a deferred annuity contract?

Purchase insurance

Which of the following is the most common way to transfer risk?

The owner is guaranteed a fixed interest rate for a specific period of time

Which of the following is true regarding a market value adjusted annuity?

If it's returned during the free look period, the agreement will be void.

Which of the following is true regarding a policy with a face value less than $10,000?

It will decrease the benefits paid to the beneficiary.

Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary?

Benefits are usually limited to six months.

Which of the following statements regarding Business Overhead Expense policies is NOT true?

Single Premium

Which type of life insurance policy generates immediate cash value?

Reduction

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?

The uncertainty or chance of loss

For the purpose of insurance, risk is defined as

Promptly forwarding premiums to the insurance company

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Homogeneous.

Units with the same or similar exposure to loss are referred to as

Limited pay whole life

Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?