FREE PSI Insurance Exam Practice Questions and Answers

Question 1

A potential insured wants to buy a policy that would offer the HIGHEST level of protection for a brief period of time during which the insured will have few financial resources.
Which of the following types of insurance should the agent suggest the potential insured to purchase?

Accepted Answer

Term Life

Answer

Variable Life

Answer

Limited-Pay Life

Answer

Whole Life

Question 2

Basic whole life insurance includes ALL of the following EXCEPT:

Accepted Answer

Interim term

Answer

Continuous premium

Answer

Limited payment

Answer

Limited payment

Question 3

Most premiums for whole life insurance are:

Accepted Answer

Fixed

Answer

Variable

Answer

Adjustable

Answer

Flexible

Question 4

Living benefits are provided by which life insurance?

Accepted Answer

Whole

Answer

Term

Answer

Conventional

Answer

No life insurance policy provides living benefits.

Question 5

This life insurance policy protects the insured against death for the rest of his or her life, but premiums are not paid for the whole time.

Accepted Answer

20-pay life

Answer

Modified whole life

Answer

Indeterminate premium

Answer

Economatic life

Question 6

Which of the following about the cash value of an ordinary whole life policy is not true?

Accepted Answer

It may be used as a policy loan without affecting the death benefit.

Answer

It can be used to pay policy premiums.

Answer

It grows tax deferred.

Answer

It is a nonforfeiture value that is fully guaranteed to the policyowner.

Question 7

A limited payment life insurance policy has all of the same characteristics as a straight life insurance policy, with the exception of:

Accepted Answer

Premium-paying period is longer.

Answer

Premiums are higher.

Answer

Cash value accrues more quickly.

Answer

Policy is paid up before the age of 100.

Question 8

Under a personal policy, someone insured who CANNOT perform the tasks of his or her own occupation for a specified length of time is?

Accepted Answer

totally disabled

Answer

occupationally disabled

Answer

permanently disabled

Answer

residually disabled

Question 9

What's guaranteed with a straight life policy?

Accepted Answer

Both cash value and death benefit

Answer

Death benefit only

Answer

Cash value only

Answer

Neither cash value nor death benefit

Question 10

All of the following characteristics of a single premium whole life insurance EXCEPT:

Accepted Answer

Face amount is variable

Answer

Coverage provided for the insured's entire life

Answer

Immediate cash value

Answer

Back-end loaded

A potential insured wants to buy a policy that would offer the HIGHEST level of protection for a brief period of time during which the insured will have few financial resources.Which of the following types of insurance should the agent suggest the potential insured to purchase?

A potential insured wants to buy a policy that would offer the HIGHEST level of protection for a brief period of time during which the insured will have few financial resources.
Which of the following types of insurance should the agent suggest the potential insured to purchase?