Download PSI LIFE INSURANCE EXAM 2025 LATEST QUESTIONS AND ANSWERS GRADED A+ and more Exams Insurance law in PDF only on Docsity!
PSI LIFE INSURANCE EXAM 2025 LATEST
QUESTIONS AND ANSWERS GRADED A+
What kind of retirement plan can a 75-employee for profit corporation establish?
Simple IRA
The taxable portion of a monthly income benefit paid during the annuity phase from a nonqualified annuity is calculated using the
Exclusion ratio
Unfair claims settlement methods and practices by an insurance company include all of the following acts EXCEPT
failure to pay all claims that are reported within 90 days after a loss occurs
The settlement option that allows proceeds to remain with the insurer and the earnings to be paid to the beneficiary on a monthly basis is called
Interest only
Regulations on life insurance advertising apply to which of the following insurance company materials?
A radio commercial that promotes the benefits of a specific company's life insurance products
An insurance company may contest a life policy within a MAXIMUM of how many years after the policy's effective date?
2
All of the following factors are used in life insurance premium determination EXCEPT
Morbidity
The authorization used to obtain the applicant's medical information that will be used by the insurer for the primary purpose of determining eligibility must include:
the time frame in which the insurer must release the eligibility decision to the agent
An intermediary who omits information on an insurance application without the applicant's knowledge and submits the application to the insurer may be guilty of:
Misrepresentation
In Wisconsin, an "intermediary" is defined as a representative of:
A Solicitor
All of the following statements regarding a group annuity are correct EXCEPT
Each employee signs and receives an individual contract
Statements by an application concerning personal health history, family health history, occupation, and hobbies are referred to as
Representations
Which of the following entities is responsible for notifying an insurance company of a disability insurance claim?
- Insured
- Insured's physician
An insurer may cancel a policy midterm for all of the following reasons EXCEPT when the insured:
Has a change in marital status
An accelerated death benefit
Pays a portion of the face amount when a policyowner is determined to be terminally ill
Upon annuitization, which of the following will have the HIGHEST monthly payout?
Straight Life
Backdating on a life insurance policy is the practice of
Making the policy effective on an earlier date then the present
Wisconsin insurance law requires intermediaries to keep policyholder records for at least how many years after termination or lapse of the policy?
3
When underwriting group life insurance, the underwriter
Typically evaluates the group as a whole
What element of a contract does the application represent?
Offer
An life insurance policy is required to contain which of the following provisions?
A reinstatement provision during which the interest may be charge for late payments
In which of the following fixed annuity features is the surrender value tied to interest rates?
Market value adjustments
AD
Which of the following policies allows for partial surrender?
Universal Life
Any form that becomes part of an insurance contract must be filed at the Office of the Commissioner of Insurance
Prior to its use
Keogh (HR 10) plans were designed to provide retirement benefits for
Self-employed individuals
Which statements is NOT a characteristic of Group Life insurance plan?
Individual underwriting
Insurance applications with an AVERAGE life expectancy without higher than normal risk factors are considered which type of risk?
Standard
Which of the following dividend options is taxable?
Accumulation at interest
Which nonforfeiture option allows the policyowner to purchase less coverage for life?
Reduced Paid-Up Insurance
It includes the right to select the investment which will provide the greatest return
Which of the following is a potential DISADVANTAGE of a fixed annuity?
Annuitants could experience a decrease in the purchasing power of their payments over a period of years due to inflation
A premium is due on a life insurance policy the first of each month. The policyowner failed to pay the premium and 20 days later the insured died. Under which of the following provisions would the death benefit be paid?
a nonforfeiture clause
The period after an annuity is purchased but before distributions begin is referred to as the
accumulation phase
In order to ensure compliance with the law, the Insurance Commissioner may issue
orders
As a form of level premium permanent insurance, ordinary life insurance accumulates a reserve that eventually
equals the face amount of the policy
An intermediary is employed by an insurance agency affiliated with a lending institution. As a condition for a loan, the institution requires placement of insurance on the applicant's life with the affiliated agency. In this situation the institution's action is referred to as:
Twisting
If Term Life is renewable, the policyowner is purchasing the right to renew the policy
without showing proof of insurability
An important goal of the Interstate Insurance Product Regulation Compact is to
Provide insurers a single point of filling for review and approval of certain policy forms
AD
The insurance security fund protects insureds from an insurer's
liquidation
Which rider would allow additional insurance to be purchased at specified dates of events, without additional underwriting?
Guaranteed insurability
Which of the following is an element of insurable risks?
the loss must be calculable
Upon the death of an insured individual, what does life insurance guarantee to deliver to the beneficiary?
a specified sum of money
Specific statements made on an application that the insured guarantees to be TRUE are
warranties
Which of the following statements is CORRECT about an insurance company that discovers collusion between a policyholder and an intermediary?
the company is relieved of its obligation to pay a claim
Which of the following is NOT a requirement of a qualified plan?
It must discriminate as to who can participate
An immediate annuity begins making payments after the
first premium has been paid
If an annuitant is making premium payments on a periodic basis, which type of annuity have they purchased?
Deferred
The accumulated cash value of a whole life insurance policy becomes the
amount used to purchase paid up additions to the insured's policy
The settlement option that pays a specified amount to an annuitant, but pays no residual value to a beneficiary is known as
Insurance company issues the policy
In Wisconsin the intermediary holding which of the following licenses is exempt from continuing education requirements?
credit insurance
Contributions made to a Roth IRA are
Not tax deductible
Who can surrender an annuity during the accumulation period?
the policyowner
An annuity that guarantees a given number of income payments, whether or not the annuitant is alive to receive them, is referred to as
a life annuity certain
Which term describes naming a contingent beneficiary as "all of my children"?
Class designation
A contract in which the company would be legally obligated to perform is considered
conditional
Which type of insurance policy is characterized by premiums that are fully paid-up within a stated period, after which no further premiums are REQUIRED?
Limited payment life insurance
What is it called when an insurer writes only insureds who have known risks?
Predictable loss
Disclosure requirements for the sale of annuities do NOT apply to
Immediate annuities
Sam had a $100,000 5-year, non-renewable level term life insurance policy with his wife as the beneficiary. Sam dies 8 years after the inception date of the policy. How much will be paid to Sam's wife?
Nothing
one month from the annuity's purchase date
In a policy collaterally assigned, proceeds will be paid upon the death of an insured to the
Beneficiary only
Once an insurance company's liability on a claim is established, the company MUST
Settle the claim in good faith
Annuities purchased with a series of premium payments that vary year to year are called
Flexible premium deferred annuities
An insurance company is deemed to know any facts material to a risk in which of the following situations?
An intermediary learns of a material fact when delivering the policy
An insured has a policy with a cash value of $1,500 and an outstanding loan of $500. How much money will the insured receive under the cash surrender value option?
$1,500 or $1,
An intermediary may receive a commission on business written on the intermediary's own life ONLY if the intermediary
Is a licensed life agent in Wisconsin and has sold insurance with the same company during the prior year with total premiums exceeding the premium on the intermediary's own life
A policy summary MUST contain the
date on which the policy summary is prepared
Under 18 USC 1033, anyone involved in the business of insurance by willfully embezzling funds intended for payment of interstate insurance transactions is subjected to which of the following penalties?
Fine and/or imprisonment
A policy may contain provisions excluding or restricting coverage as specified in the event of death under all of the following except
