PSI Life & Health Insurance Exam Practice Test
Medical insurance for 65 and older, people under 65 with disabilities, people with end stage renal disease. When you're eligible, you can enroll in Medicare Parts A and B - also known as Original Medicare - through the Social Security Administration. If you are already receiving Social Security or Railroad Retirement Board benefits you'll automatically be enrolled.
What is Medicare
Key person insurance is a type of life insurance policy that provides a death benefit to a business if its owner or another significant employee passes away, according to the Insurance Information Institute (III).
What is key person insurance?
You'll usually pay 20% of the cost for each Medicare-covered service or item after you've paid your deductible. Medicare pays 80%
What percentage of medical bills Does Medicare pay?
Spendthrift Provision
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
It becomes inactive
When an agent doesn't hold any active appointments, what happens to the agent's license
Transfer
When an individual purchases insurance, what risk management technique is he or she practicing?
when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year
When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax?
At all times.
When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner?
2 year period
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial
When particular benefits are not listed on a payment schedule
When will a policy pay on a UCR basis?
Establishing a trust to administer proceeds
Which is a common approach to addressing the problems inherent in naming a minor as a beneficiary to a life insurance policy?
Participating policies pay dividends while non-participating policies do not
Which is the difference between participating and non-participating policies?
The insurer's financial rating
Which of the following does NOT need to be identified in an insurance policy?
To minimize the insured's level of liability in the event of loss
Which of the following is NOT a goal of risk retention?
Beneficiaries are not identified by name?
Which of the following is TRUE about class designation?
The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount
Which of the following is TRUE for a flexible premium annuity?
A patients care is coordinated by an in-network primary care physician
Which of the following is TRUE of a point of service plan?
They are MORE likely to receive a loan based on the exceptions of the proceeds
Which of the following is TRUE regarding assignment rights for irrevocable beneficiaries?
Variable whole life has a guaranteed death benefit
Which of the following is a key distinction between variable whole life and variable universal life products?
plan does not meet federal guidelines for tax benefits
Which of the following is characteristic of a non-qualified plan?
Creditor is the policyowner
Which of the following is true about credit life insurance?
All unearned premiums must be returned to the insured
Which of the following is true of a cancelable policy?
It transfers rights of ownership from the owner to another person
Which of the following statements is true about a policy assignment?
Decreasing Term
Which of the following types of insurance policies is most commonly used in credit life insurance?
NCOIL Act
Which of the following was specifically designed to address STOLI and IOLI practices?
Insuring clause
Which part of an insurance contract contains promise to pay losses covered by the policy in exchange for the insured's premium and compliance with policy terms?
Health savings account (HSA)
Which plan is most commonly paired with a High Deductible Health Plan?
Free Look
Which policy provision permits the policy owner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms or costs?
The producer
Who's responsibility is it to make certain that an application is filled out completely and correctly?
for increased amount protection
Why do equity-indexed life insurance policies have an increased premium?
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
Fraud
A deceptive act or practice committed by a person with the intent to secure an unfair advantage or unlawful gain is known as
a life-changing event, such as marriage, divorce or child birth
A group conversion option may be used in all of the following EXCEPT
Family Protection Policy
A young father would like a life insurance policy to provide coverage for all five family members at the lowest cost. Which type of policy would he most likely buy?
Pure Risk
According to the California insurance code, which of the following can be classified as an insurable event?
Policy Face, Conditions, Insuring Clause
All life insurance and health insurance contracts contain all of the following
it generally is not renewable beyond a certain age, the insured may be left with inadequate protection when it is most needed, it becomes considerably more expensive over time
All of the following are disadvantages to an annually renewable term life policy
fixed period installments
All of the following are dividends options EXCEPT? REMEMBER OH CRAP
credited with the appropriate number of quarters of coverage, disability expected to last 12 months or end in death, total and permanent disabled for at least 5 months
All of the following are requirements to qualify for Social Security disability benefits
the rider is available to all insureds with no additional premium
All of the following are true regarding the guarabteed insurability rider EXCEPT
Free Look Period
An insured has the right to return the new insurance policy for a full refund during the
Consideration
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy
403(b) Plan (TSA)
An internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
An administration penalty of no less than $5,000 and no more than $50,000 per violation
Any insurance agent commits a repeated violation of the insurance code with respect to insurance replacement will be liable for
Are subject to vesting requirements
Employer contributions made to a qualified plan
Insurers must allow individual life insurance customers the ability to return their new policy within 10-30 days (this time period is up to the insurer) for a full refund.
Every individual life insurance policy must provide for a free-look provision that lasts for at least
12 weeks of no work within one year
FMLA Child Birth
age
Fo an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following?
6 months
For how long is an insurance company allowed to defer policy loan requests?
Trained and registered volunteers. Service is free
HICAP counselors are primarily
to purchase insurance on a family member of the originally insured
How are term riders used
Securities (Investment License)
If an agent wishes to sell variable life polices, what license must the agent obtain?
seven-pay test
In order to avoid being classified as an MEC, a policy must pass which of the following
Executive is the owner, and the executive pays the premium
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
Survivorship life insurance insures two people and only pays out the death benefit after both have passed away. It's often purchased by a couple as a means of leaving money to their children, estate planning, leaving a sizeable legacy, or funding a support system for a dependent who may require lifetime care. Survivorship life insurance can also be called: Joint survivorship life insurance Second-to-die life insurance
Survivorship life insurance is a type of joint life insurance
Whole life insurance
To which of the following products does the replacement regulation apply?
Coverage ends and the policy cannot be reinstated
What happens when a policy is surrendered for cash value?
A - inpatient/ hospital care B - outpatient/ medical coverage C- Alternative ways to receive (medicare advantage) D - Prescription
4 Parts of Medicare
Increasing beneficiary cost sharing, controlling inpatient admissions and length of stay, selectively contracting with health care providers
Managed care plans increase efficiency by
Fair Credit Reporting Act
Obtaining consumer information reports under false pretenses is prosecutable by which of the following
Non-occupational injuries
Short term disability insurance generally only covers injuries due to which of the following?
All of the above:-Counseling and advocacy to assist individuals with long-term care planning and insurance policies, billing, or claims.-Information through community forums about the myths and realities of Medicare and private health insurance.-Legal representation and advice when necessary and appropriate.
The goals of HICAP are to provide
The policy is delivered to the applicant, the first premium is collected, the statement of good health is obtained by the insurer
The life insurance policy will not be truly effective until all of the following
A profitable distribution of exposures
The protection of the insurer from adverse selection is provided in part by
The insured's beneficiaries
The title page of the policy provides a summary of the benefits and coverages provided by the policy. All of the following is included in the title page EXCEPT
SEC Registration
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
25
Until What age can you remain on parents health insurance policy?
45 days
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 policy?
62
What age can you collect social security?
Containing costs and early treatment
What are two characteristics of Health Maintenance Organizations (HMOs)?
medical information on an applicant for assessing life or health insurance risk
What is MIB Report
3 Years
What is the maximum amount of time the insured has to file legal action against the insurer after written proof of loss is provided
Fraudulent missstatements
which of the following is exempt from the incontestability provision in insurance policies?