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?