PSI – NY Life, Accident and Health Practice Exam
Questions With 100% Correct Answers (2022)
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?
- Free Look
When will a policy pay on a UCR basis? – When particular benefits are not listed on a payment
schedule
Which type of rider reimburses health and social service expenses incurred in a convalescent or
nursing home facility? – long term care rider
Which of the following is exempted from the incontestability provision in insurance policies? –
Fraudulent misstatements
What does first dollar coverage mean? – As soon as covered medical expenses are incurred, the
policy begins to pay
What is the waiver of premium provision? – In a long term care contract, the premium is waived
after the insured has been confined for a specific period of time
According to the Time Payment of Claims provision, the insurer must make the payment
immediately after receiving proof of loss EXCEPT – for claims involving periodic payments
Which is a disadvantage to a flexible premium annuity? – the actual amount of the annuity benefit
cannot be determined in advance
When a policy or certificate containing an accelerated benefit provision is applied for or delivered,
the producer is responsible for providing that applicant a summary of coverage that includes all of
the following EXCEPT – a detailed and comprehensive summary of the accelerated benefit
which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? - the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis
How does a noncancelable policy differ from a guaranteed renewable policy? – with the non
cancelable policy the insurer may increase premiums only based on the terms of the policy
What does it mean if a health policy is conditionally renewable? – Insurer may elect NOT to renew
only under the conditions specified in the policy
When the suicide clause is inserted in a life insurance contract, death by suicide is not covered
during the policy’s initial: – 2 year period
What does coinsurance mean? – The insurer and the insured share expenses over the deductible.
Which of the following must be given to the insurer within 20 days after occurrence or
commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible? –
Notice of claim
The right to change the beneficiary or dispose of the policy or its benefits in any manner one
chooses is reserved to the policy owner UNLESS which of the following is true? – The policy owner
has named an irrevocable beneficiary
Which of the following refers to how often a premium is paid? – Mode
All of the following are common exclusions from loss found in disability income policies EXCEPT for
that incurred while – Committing a misdemeanor
At which point are contractual death benefit settlement options determined and by whom are they
determined? – At the time the policy is purchased by the owner of the policy
All of the following are ownership rights EXCEPT – Switching the policy from one insured to another
All of the following are TRUE regarding incomplete applications EXCEPT – The incomplete
application can be accepted with the missing information added later
A consumer report used to determine eligibility for insurance may include all of the following
EXCEPT – Medical underwriting exam
All of the following are required signatures on a life insurance application EXCEPT – The minor in a
juvenile policy
Why are insurance policies considered conditional contracts? – Certain conditions need to be met to
make the contract legally enforceable.
When does insurable interest come into play in a life insurance policy? – when the applicant for the
policy is not the insured
Which of the following occurs immediately after the application is submitted and the initial
premium paid? – the underwriting process begins
Obtaining consumer information reports under false pretenses is prosecutable by which of the
following? – Fair Credit Reporting Act
What is the purpose of Stranger-originated life insurance (STOLI)? – the policy is originated
primarily or solely for the purpose of resale
All of the following are classifications of risk EXCEPT – non-nicotine
What specific new procedures does the USA Patriot Act require of insurance companies? – Establish
an anti-money laundering program
What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant
and the agent do not recall the changes that were made in a completed application? – The applicant
and possibly the agent initial any changes made.
What is a MIB report? – medical information on an applicant for assessing life or health insurance
risk
How do warranties differ from representations? – a warranty is guaranteed to be true, a
representation is believed to be true to the best of one’s knowledge.
If the insurer wishes to share an applicant’s HIV status, the applicant must be given full notice of all
of the following EXCEPT – the treatment procedures that are covered by the policy.
Which of the following was specifically designed to address STOLI and IOLI practices? – NCOIL Act
Why is rehabilitation considered worthy of federal help under workers’ compensation? – it reduces
insurance losses and helps regain the worker’s dignity
In a case where an individual’s health is insured by both their own policy and their spouse’s policy,
which policy pays in the event of an illness? – The individual’s policy pays first, the spouse’s policy
pays the remaining up to coverage amount.
The group conversion option is allowed for all of the following EXCEPT – during the annual benefits
enrollment period.
What type of insurance should a company purchase if it wants to insure the life of its CEO? – key
person insurance
All of the following are tax qualified retirement plans EXCEPT – Section 529 plan.
Why is relying solely on employer group life insurance generally considered inadequate for most
individual’s needs? – It is financially insufficient to cover end of life expenses.
For an individual long-term care policy there is an annual dollar limit for tax deductions that is
based on which of the following? – age
When can the premiums of an individually owned health insurance policy be deducted from the
individual’s income tax? – when the taxpayer’s medical expenses exceed 7.5% of adjusted gross
income during a taxable year