PSi Exam
What element of a contract does the application represent?
Offer
In order to reduce premiums, a life insurance policy can legally be backdated up to:
6 months
The insured is dissatisfied with the handling of a claim. How long does the insured have to bring lawsuit against the insurer?
1 year
How long is the grace period for a monthly premium health insurance policy?
10 days
How many days after a major medical policy is delivered does a consumer have to return it for a full refund?
10 days
Under Nebraska constitution rules, an employer with fewer than 20 employees must allow terminated employees to continue sickness and accident coverage for at least:
12 months
What is the minimum age requirement for an applicant's Nebraska resident insurance producer license?
18
Under the (COBRA) guidelines, an organization with 20 or more employees must administer continuing health insurance to a former employee who does not experience a disqualify event for AT LEAST:
18 months
How many credit hours of continuing education must a licensed individual obtain in each 24-month licensing period?
24 hours
Long-term care insurance will provide coverage for a minimum of how many months?
24 months
Dependent children can be covered under an individual's group plan up to what age?
26
To be considered a high-deductible health plan (HDHP), what is the minimum deductible for family coverage?
2700
A licensee who is required to take continuing education must include how many coursework hours?
3
Mary has a 30-year $90,000 decrease term life insurance policy. Which of the following is the MOST likely amount that the policy would pay if Mary dies in the 20th year
30,000
How many days does a terminated employee have to convert the group life insurance to an individual policy?
31 days
Sue is the sister of a licensed Nebraska Insurance producer, Frank. Frank was recently killed in a car accident and Sue has been licensees a temporary license to run Frank's agency. For what period of time is the initial temporary license valid?
6 months
In accordance with Nebraska state Law, medical records for adults must be kept for a minimum of which of the following time periods?
7 years
An agent is required to give an applicant for life insurance with long care benefits?
A binding receipt for coverage
A marketing system in which there are no agents and insurance is sold through direct mil or over the phone is called:
A direct response system
A condition in a cash value life insurance policy that allows a policy owner to terminate the policy in return for a reduced paid up policy of the same type is referred to as:
A nonforfeiture provision
Which of the following individuals is required to be licensed as an insurance consultant in the State of Nebraska?
A person providing insurance advice for a fee
If an individual is making premium payments on a periodic basis which type of annuity have they purchased:
Fixed period
The dental specialty concerned with the straightening or moving misaligned teeth is called:
Orthodontics
Per the Age Discrimination in Employment Act, what is the minimum age group that is protected from age discrimination in any company's employment policies, including hiring, firing, salary, employee benefits or age harassment by supervisors, coworkers, and clients?
Ages 40 and older
Accident only policies commonly include benefits due to losses relate to:
Accidents or fortuitous events
Kelvin is receiving tax deferred growth until retirement. In what phase would Kelvin's annuity be?
Accumulation Period
The Group Life underwriting risk selection process helps protect insurers from:
Adverse selection
Prior to annuitization, what is the nonforfeiture value of an annuity
All premiums paid, plus interest, minus any withdrawals and surrender charges
In Nebraska, converting a group accident and health policy to an individual policy requires:
An application submitted within 90 days of the termination date
Which of the following is an example of a moral hazard?
An individual sets fire to a building to collect the insurance money
A single deductible applying to both medical and dental insurance coverages is referred to as:
An integrated deductible
Without written consent, a policy owner CAN NOT change the beneficiary if he has named:
An irrevocable beneficiary
Which statement is true regarding the annuitant?
Annuity payments will be based on the annuitant's life expectancy.
An insurance producer shall NOT act as an agent of an insurer unless the insurer:
Appoints the producer
When helping a consumer choose a suitable annuity, an insurer is required to do which of the following?
Base the recommendation on facts disclosed by the consumer relating to their finances and needs
Companies issue preferred risk policies with reduced premiums with the expectation of:
Better than normal mortality experience
The levels of coverage defined by the Affordable Care Act are:
Bronze, Silver, Gold, Platinum
Two business partners own life insurance on each other. If one partner dies, which of the following contracts allows the surviving partner to use the death benefit to purchase the deceased owner's interest?
Buy-sell agreement
Blood tests to detect the presence of HIV are commonplace, Laws have been passes allowing insurance companies to:
Call the applicant if the HIV test is positive
What is an insurer required to have in order to conduct business in the State of Nebraska?
Certificate of Authority
For policy holders in the same risk classification, it is unlawful to:
Charge different premiums
A fixed percentage of a covered loss that an insured enrolled in a dental plan may be obligated to pay for dental services is known as:
Coinsurance
Which is considered an expense factor in an insurance premium?
Commissions
Which condition voids an insurance policy?
Concealment
The proposed insured's statement on the application and the first premium payment are part of the policy's:
Consideration Clause
One of the purposes of the formation of the MIB was to
Create a medical information resource for non-medical personel
A contract will be deemed invalid if:
One party was not competent
Which of the following is an example of a presumptive disability?
Deafness
Which type of life insurance policy is appropriate coverage for a financial obligation that requires a regular periodic payment, such as a morgage?
Decreasing Term Policy
Publishing an article which includes false statements about the financial condition of an insurer is an example of:
Defamation
If an insured is engaged in an illegal occupation which contributed to the insurer's loss, what action can the insurer pursue?
Deny the claim
Which is an example of controlled business conducted by a producer?
Depositing premiums received by applicant in a non-business designated account.
Lightning strikes a house and damages the roof. This represents which type of loss?
Direct
The Internal Revenue Code enables a tax-free, Section 1035 exchange of a life insurance policy to a different policy if it occurs:
Directly from the policy owner to the insurance company
Joining Medicare Part D during the initial enrollment period will:
Eliminate the possibility of paying a late enrollment penalty
Which of the following is a cost containment method that encourages procedures be performed in a surgical center on an outpatient basis when available?
Emergency Services
Health reimbursement accounts are funded through contributions made by the:
Employer on a taxable basis
As a form of level premium permanent insurance, ordinary life insurance accumulates a reserve that eventually:
Equal the face amount of the policy
Generally rates charged fo insurance may NOT be:
Excessive, inadequate, or unfairly discriminatory.
Which of the following statements is CORRECT when comparing community rating with experience rating?
Experience rating considers the job experience of the workers covered by a group plan
An insured's home is built on a flood plain, therefore the home is susceptible to flood damage. This is an example of:
Exposure
What law do all insurers and their agents need to comply with in regard to the information being obtained from a third party concerning the applicant?
Fair Credit Reporting Act
Which of the following is a basic benefit of Medicare Supplement Insurance?
First 3 pints of blood
An immediate annuity begins making payments after the:
First premium has been paid
Which of the following guarantees that the annuitant CANNOT outlive their benefits?
Guaranteed lifetime withdrawal benefits
Which of the following is a health insurance policy where the insurer has the right to change the premiums for the policy owners but CANNOT cancel the policy?
Guaranteed renewable policy
Under Social Security disability coverage, a fully insured individual is one who:
Has been credited with the appropriate number of quarters of coverage
Which of the following insurance policies pays a specific amount of insurance for each day an individual is hospitalized?
Hospital Indemnity Insurance
Through an individuals agent contract does NOT specifically address this practice of providing client s with insurance advice, the power or authority to do so is considered:
Implied
A purpose of the Insurance Fraud Act is to:
Impose criminal penalties on individuals who have been found guilty of insurance fraud
The settlement option that pays a specified amount to an annuitant, but pays no residual value to the beneficiary is known as:
Life Income
The principle that when a loss occurs the insured is restored to the approximate financial conditions they were in prior to the loss is called:
Indemnity
Which statement is NOT a characteristic of Group Life Insurance Plans?
Individual Underwriting
All of the following types of calls are exempt from the Do-Not-Call registry EXCEPT:
Insurance sales calls
Reinsurance is a specialized branch of the insurance industry because they:
Insure Insurers
On an individual insurance application, which of the following signatures is NOT Required?
Insurer
Which of the following is a characteristic of level premium life insurance?
It can be used for cash value
An annuity that guarantees a given number of income payments, whether or not the annuitant is alive to receive them, is referred to as:
Life annuity certain
What does a limited payment whole life policy provide?
Life time protection
All of the following factors are used in determining premiums except:
Liquidity
Which type of coverage would be MOST appropriate for an individual who needs custodial care at home?
Long-term care
Medicaid is a government-funded program designed to provide health care to:
Low income state resident
Which is an accurate statement regarding the taxation of personal life insurance?
Lump sum death benefits are income tax free
A single contract for Group Medical insured to an employer is known as:
Master policy
A producer moved on April 1 and must inform the director of insurance of the address change no later than what date of the same year?
May 1 (30 days)
Which of the following is provided by a limited policy?
Medical expenses
In Nebraska, Insurance companies must charge the same rate for disability income insurance for individuals:
Of the same class and same hazard
Legal entities established for the purpose of providing group health benefits to participants are:
Multiple Employer Welfare Arrangements (MEWA)
If there is a conflict between a policy provision and state statutes the policy
Must meet minimum statute requirements
Who approves the continuing education courses required for producers in Nebraska?
National Association of Insurance Commissioners
If a policy owner selects a settlement option prior to maturity, who has the ability to change that option?
No one
According to the Fair Credit Reporting Act, an insurer needs to do all of the following EXCEPT:
Notify the applicant if an application is denied
Under Nebraska Insurance Code, what must a licensee do prior to operating under an assumed business name?
Notify the director
Individuals who are eligible for Medicare on the first day of the month in which they turn age 65 are automatically enrolled in:
Part B
Which of the following Medicare plans allows participants to choose to receive their benefits thorough a managed health care plan?
Part C
An insured has a 5 -year Renewable Term Life Insurance Policy. Upon exercising the renewable privilege, the insured MUST:
Pay an annual premium that may be higher
A life insurance policy has lapsed due to non payment of premiums, To activate the reinstatement clause in the policy the insured MUST:
Pay the premiums within 15 days of the grace period
An insured has a 20-pay life policy with a. paid-up dividend option. In this option, the insured may:
Pay up the policy early by using dividends
What information about a life insurance applicant does a producer include in the producer report?
Personal knowledge and observations
Under a medical expense policy, all of the following are common exclusions EXCEPT:
Physical Therapy
Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date the:
Policy is delivered and accepted
The insurance with other insurers provision in an individual accident and health insurance policy allows an insurer to pay benefits to the beneficiary on a pro-rate basis when then:
Policy is within 31 days of the renewal rate
The accumulated cash value of a whole life insurance policy becomes the:
Policy loan value upon which the insured may borrow
The person who can request changes to an individual life insurance contract is the:
Policy owner
A document that specifies the critical segments of an insured's life insurance policy is known as:
Policy summary
Mutual companies are owned by which of the following?
Policyowners
Which risk classification will an individual most likely have if he does not smoke, is not overweight, and is in excellent physical condition?
Preferred
Which of the following is described when a selected group of practitioners, in a certain area, agree to provide services at a pre-arranged cost on a fee-for-service basis?
Preferred provider organization
A life insurance policy becomes effective when the:
Premium is collected and policy is issued
When using the needs approach to determine the amount of life insurance needed, it is necessary to determine all of the following EXCEPT:
Projected lifetime earnings in the stock market, including dividends and growth account
What is the purpose of the Insurance Frauds prevention Act?
Protects consumers against illegal activity in the insurance of policies and payment of claims.
What is the purpose of the automatic premium loan rider?
Protects the policy owner against an unintentional lapse of coverage
Which of the following would be the most appropriate reason for a 35-year-old male in good health, who is the father of school-aged children, to purchase term life insurance?
Provide financial security for dependents
The primary purpose of respite care is to:
Provide temporary relief to the patient's primary caregiver
The MIB is an organization which:
Provides a database for member companies to receive and report pertinent applicant information
A reason for using consumer reporting agencies to gather information about insurance applicants in to obtain:
Publicly accessible information for both the insurer and the applicant on a fee-for-service basis
Which of the following is an example of risk sharing?
Purchasing an insurance policy to cover liability exposures
An agent license is NOT required when:
Receiving a referral fee
All of the following claims settlement practices could initiate a cease and desist order except:
Refusing to pay a claim which was not reported to the insurer or its producer in the required time
Most statements contained in the insured's application for insurance are considered?
Representations
If an insured dies within a specified time of policy insurance, which of the following refunds the purchase payments to the beneficiary?
Return of premium rider
Dividends paid on personal life insurance are not taxable because they are considered:
Return of unearned premium
According to the Affordable Care Act, essential health benefits do NOT include which of the following categories?
Routine vision are for adults
An agent's underwriting duties include which fo the following?
Setting premium amounts
Which type of insurance policy creates immediate cash value?
Single premium whole life
What is required before HIV testing can be performed as part of individual accident and health insurance underwriting?
The applicant must sign a consent form
How will the benefits one a short-term disability policy be taxed when the premium was paid by the employers?
The benefits will be taxable to the employee
Which of the following transactions would NOT be subject to income tax under a MEC?
The death benefit
An insured owns a whole life policy that has accumulated cash value. Which of the following statements is true about the policy's cash value?
The growth of the policy's cash value is not subject to income tax while the policy is in force.
What are the tax implications of an insured's health insurance costs if the insured is self employed with an S corporation, has a net profit for the last year, and is unmarried?
The insured can deduct 100% of all health insurance costs from his gross income
Who does not have insurable interest in the insured?
The insured's neighbor
Under traditional fixed annuity contract, the party who assumes the investment risk is the:
The insurer
Which of the following is a primary consideration in replacing a health insurance policy?
The limitations and exclusions in a new policy
What is the most important factor when underwriting a disability insurance policy?
The occupation of the insured
All of the following statements apply to surrender of an annuity contract EXCEPT:
The owner has the right to surrender the contract during the accumulation period
An insured names her four children as beneficiaries in equal share to her $60,000 life insurance policy. Her oldest child has two children and dies prior to the insured. The other three children do not have children of their own. If the insured designated the beneficiaries per capita, how will the proceeds e distributed?
The three surviving children will each receive $15,000. The remaining $15,000 will be paid to the insured's estate.
What is the purpose of the policy review when an agent delivers a new life insurance policy to the insured?
To confirm that the insured understands all aspects of the policy
An insured wants to purchase a policy with three key elements: Flexible premium, death benefit and the choice of mutual funds where the cash value will be invested in a separate account. The insured should purchase:
Universal life
Tye types of life insurance generally used to cover key employees indemnification are:
Universal, term, and whole life insurance
Basic health care services provided by a health insuring corporation includes which of the following benefits?
Urgent Care
Which type of insurance product is regulated by both the securities industry and the state life insurance commissioners?
Variable Life
If an insurer determined the insured is totally disabled, the policy owner is relieved of paying the policy premium as long as the disability continues. This statement describes the:
Waiver of premium rider
Deferred commissions may be paid to a person who sold an insurance policy when the person:
Was a licensed producer at the time of sale
How often are group short-term disability benefits typically paid?
Weekly
If a licensee has been found to have committed any fraudulent or dishonest practice, the insurance director may do all of the following EXCEPT:
Withhold the licensee's compensation
Nebraska Insurance regulation requires that every individual life insurance policy must include a notice that states the purchaser has the right to return the policy for a full refund within how many days of it's delivery?
Within 10 days
Clark will be doing business as an agent. When MUST he be appointed by the insurer?
Within 15 days of signing the agency contract
The primary reason for purchasing life insurance is to provide:
death benefits
Risks are generally NOT insurable if:
no individuals have ever experienced a similar loss
Rob, Joe, and Mike are brothers who have a $60,000 "first-to-die" joint life policy covering all three of their lives. If joe dies first, the policy proceeds:
will not provide further insurance protection
