PSI LIFE INSURANCE EXAM LATEST REAL EXAM QUESTIONS AND CORRECT ANSWERS | A-GRADE 2024/2025, Exams of Insurance Economics

Download PSI LIFE INSURANCE EXAM LATEST REAL EXAM QUESTIONS AND CORRECT ANSWERS | A-GRADE 2024/2025 and more Exams Insurance Economics in PDF only on Docsity! PSI LIFE INSURANCE EXAM LATEST REAL EXAM QUESTIONS AND CORRECT ANSWERS | A-GRADE 2024/2025 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 Dividends are NOT subject to taxation because Paying dividends is equivalent to returning a premium The XYZ Insurance Company cancels an intermediary's contract. XYZ could be bound by the intermediary's later acts if it: Continues to pay the intermediary deferred commissions Which of the following products is designed to pay benefits that can provide a stream of retirement income to the purchaser? tax-deferred growth Which of the following guarantees that the annuitant CANNOT outlive their benefits? Guaranteed lifetime withdrawal benefit Which of the following statements is CORRECT about an insured's failure to report a claim in a timely manner based on the advice of an intermediary? It does not affect the insurance company's obligations 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? 1. Insured 2. 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 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 Events or conditions the increase the likelihood of an insured's loss are referred to as hazards What type of insurance is the cheapest option to pay off a 30-year mortgage balance? Decreasing term life Under a Universal Life Insurance policy, a corridor represents the gap between the total death benefit and the policy's cash value How many days does a terminated employee have to covert to his group life insurance policy to an individual policy? 31 If an insurer determines the insured is totally disabled, the policyowner is relieved of paying the policy premiums as long as the disability continues. The statement describes the waiver of premium rider 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 Life income What kind of retirement plan can a 1,500 employee for-profit corporation establish? 401(k) Which of the following authorities is required to examine the business records of domestic insurance companies and licensed rate-services organizations in Wisconsin? The Office of commissioner of insurance Which of the following dividend options will increase the death benefit? Guaranteed insurability Under a executive bonus plan, premiums paid by the employer are only tax deductible when the bonus is an insurance plan An intermediary should determine whether replacement is involved in a transaction no later than when the 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 Period Certain Generally, if a life application is NOT prepaid, the effective date of coverage begins on the date the policy is delivered and accepted 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 An insurance policy is a contract of utmost good faith because the insurer relies on the truthfulness of the applicant and the insured relies on the insurer's promise to Pay claims Which of the following is typically NOT a source of underwriting information for life or health insurance? Disclosure authorization response Which statement is NOT a characteristic of a group life insurance plan? individual underwriting Generally, all of the following apply to group life insurance EXCEPT evidence of insurability is not required What does a limited payment whole life policy provide? Life time protection Loans may generally be obtained against the cash value of a personal life insurance policy and policy loan proceeds Are not treated as taxable income The insurance commissioner has the right to issue which of the following orders? Compliance The purpose of the replacement regulation is to Protect intermediaries from lawsuits filed by insureds Under an executive bonus plan, if the employee takes loans from the insurance policy, the funds are: Reported as taxable income to the employee Which is the name of the policy that combines a universal life policy with investment choices? Variable universal life policy What BEST describes a limited pay life insurance policy? a whole life insurance policy where the premiums are paid up after 20 years In order to be insured, you must have a chance of financial loss or financial interest. This is called an Insurable interest An individual who is NOT acceptable by an insurer at standard rates because of health, habits, or occupation is called a Substandard Risk An example of a risk that is NOT a pure risk would be injury in an accident An applicant would be charged a higher premium for a life insurance policy if they were Older A payor benefit rider would be found on which type of policy? A juvenile life policy Under the children term rider, what occurs when a child reaches the specified age? He or she is eliminated from coverage A person who intentionally commits a criminal violation of an insurance law may be subject to a MAXIMUM fine of $5,000 Which of the following is NOT a settlement option for life policies? extended term