CA LIFE EXAM – PSI EXAM
QUESTIONS & ACCURATE
COMPLETE SOLUTIONS PASSED
100%
A participating company is also referred to as which type of insurer? - Correct Answer
✔✔ Mutual insurer
An insurer owned by its policyholders, is called a - Correct Answer ✔✔ Mutual insurer
What is a participating life insurance policy? - Correct Answer ✔✔ Contract that allows
the policyowner to receive a share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from
insurance policies it issues. What is this agreement called? - Correct Answer ✔✔
Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - Correct Answer ✔✔ Participating
Which of the following is not a characteristic of reinsurance? - Correct Answer ✔✔
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - Correct Answer ✔✔ Losses due
to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - Correct
Answer ✔✔ Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? - Correct Answer ✔✔ Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
- Correct Answer ✔✔ Captive insurers
Which of the following is not considered to be a definition for the term "loss"? - Correct
Answer ✔✔ Probability that an event will occur
Which of the following is not considered a definition of a risk? - Correct Answer ✔✔ The
cause of loss
, Which of the following best describes the statement; " the more times, and event is
repeated, the more predictable the outcome becomes"? - Correct Answer ✔✔ Law of
large numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? - Correct Answer ✔✔ Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
Correct Answer ✔✔ Speculative risk
Which of the following is any situation that presents the possibility of a loss? - Correct
Answer ✔✔ Loss
An insurer having a large number of similar exposure units is considered important
because: - Correct Answer ✔✔ the greater the number insured, the more accurately
that is her can predict losses & set appropriate premiums
Which of these statements correctly describes risks? - Correct Answer ✔✔ Pure risk is
the only insurable risk
Which type of risk is gambling? - Correct Answer ✔✔ Speculative risk
Moral hazard is described as the: - Correct Answer ✔✔ increased chance of a loss
because of an insured's dishonest tendencies
All of the following circumstances must be met for los retention to be an effective, risk
management technique, except - Correct Answer ✔✔ Probability of loss is unknown
All of the following circumstances must be met for lost attention to be an effective risk
management technique, except - Correct Answer ✔✔ Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage -
Correct Answer ✔✔ Reinstatement provision
In a life insurance policy, the entire contract consists of - Correct Answer ✔✔ policy and
attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? - Correct Answer ✔✔ Grace period
Which of the following is not a common life insurance policy later? - Correct Answer ✔✔
Extended term
What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? - Correct Answer ✔✔ Policies, cash value is not affected
QUESTIONS & ACCURATE
COMPLETE SOLUTIONS PASSED
100%
A participating company is also referred to as which type of insurer? - Correct Answer
✔✔ Mutual insurer
An insurer owned by its policyholders, is called a - Correct Answer ✔✔ Mutual insurer
What is a participating life insurance policy? - Correct Answer ✔✔ Contract that allows
the policyowner to receive a share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from
insurance policies it issues. What is this agreement called? - Correct Answer ✔✔
Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - Correct Answer ✔✔ Participating
Which of the following is not a characteristic of reinsurance? - Correct Answer ✔✔
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - Correct Answer ✔✔ Losses due
to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - Correct
Answer ✔✔ Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? - Correct Answer ✔✔ Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
- Correct Answer ✔✔ Captive insurers
Which of the following is not considered to be a definition for the term "loss"? - Correct
Answer ✔✔ Probability that an event will occur
Which of the following is not considered a definition of a risk? - Correct Answer ✔✔ The
cause of loss
, Which of the following best describes the statement; " the more times, and event is
repeated, the more predictable the outcome becomes"? - Correct Answer ✔✔ Law of
large numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? - Correct Answer ✔✔ Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
Correct Answer ✔✔ Speculative risk
Which of the following is any situation that presents the possibility of a loss? - Correct
Answer ✔✔ Loss
An insurer having a large number of similar exposure units is considered important
because: - Correct Answer ✔✔ the greater the number insured, the more accurately
that is her can predict losses & set appropriate premiums
Which of these statements correctly describes risks? - Correct Answer ✔✔ Pure risk is
the only insurable risk
Which type of risk is gambling? - Correct Answer ✔✔ Speculative risk
Moral hazard is described as the: - Correct Answer ✔✔ increased chance of a loss
because of an insured's dishonest tendencies
All of the following circumstances must be met for los retention to be an effective, risk
management technique, except - Correct Answer ✔✔ Probability of loss is unknown
All of the following circumstances must be met for lost attention to be an effective risk
management technique, except - Correct Answer ✔✔ Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage -
Correct Answer ✔✔ Reinstatement provision
In a life insurance policy, the entire contract consists of - Correct Answer ✔✔ policy and
attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? - Correct Answer ✔✔ Grace period
Which of the following is not a common life insurance policy later? - Correct Answer ✔✔
Extended term
What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? - Correct Answer ✔✔ Policies, cash value is not affected
