CA PSI SITE - LIFE EXAMINATION 2026/2027
Complete 200+ Questions with Verified Answers & Detailed
Rationales
INTRODUCTION
The California Life Insurance Agent Examination is administered
by PSI Exams and covers insurance principles, life insurance
products, annuities, California-specific regulations, and
consumer protection laws. Passing the exam enables
candidates to be licensed by the California Department of
Insurance to sell and service life insurance products. The Life-
Only Agent exam consists of 75 questions with a time limit
of 1.5 hours and requires a 60% passing score. The combined
Life, Accident, and Health Agent exam consists of 150
questions with a time limit of 3 hours.
EXAM DOMAINS
Domain Weight
General Insurance Concepts 15%
Life Insurance Basics & Types of Policies 15%
Policy Provisions, Riders, and Options 15%
,Domain Weight
California-Specific Regulations 15%
Annuities 10%
Life Insurance Planning & Business Uses 10%
Life Settlements 6%
Ethical Practices & Consumer Protection 14%
California Exam Facts to Know Before You Go:
• Minimum Passing Score: 60% (lower than some states,
but exams are comprehensive)
• Exam Time Limit: Life-Only = 1.5 hours; Life, Accident &
Health = 3 hours
• Exam Language Options: English, Spanish, Korean,
Simplified Chinese, Vietnamese, and Tagalog (as of July 1,
2024)
• Retake Limit: 10 attempts within 12 months (if failed 10
times, barred for 1 year)
• Minimum Age: 18 years
• Continuing Education: 24 hours every 2 years (includes 3
hours of ethics)
,SECTION 1: INSURANCE BASICS & RISK MANAGEMENT
Question 1. A non-admitted insurance company is best
defined as:
A) An insurer that has a Certificate of Authority from the
California Department of Insurance
B) An insurer that is not authorized to transact insurance in
California because it failed to comply with California
requirements or did not seek admission
C) An insurer that only sells life insurance products
D) An insurer that operates exclusively online
Correct Answer: B
Rationale: A non-admitted insurance company is not
authorized to transact insurance in California because it failed
to comply with California requirements or did not seek
admission from the California Department of Insurance (CDI).
Non-admitted insurers may still operate as surplus lines carriers
but are not subject to the same regulatory oversight as
admitted insurers.
Key Concept: Non-admitted = not authorized by CDI; admitted
= has Certificate of Authority.
Difficulty: Easy
, Question 2. What is the key difference between pure risk and
speculative risk?
A) Pure risks are always insurable; speculative risks are never
insurable
B) Pure risks involve the possibility of loss or no loss (no gain),
while speculative risks involve the possibility of loss, no loss, or
gain
C) Pure risks are voluntary; speculative risks are involuntary
D) Pure risks only apply to life insurance; speculative risks apply
to health insurance
Correct Answer: B
Rationale: Pure risks are insurable and involve only the
possibility of loss or no loss—there is no possibility for gain.
Speculative risks involve the possibility of loss, no loss, or gain
and are generally not insurable because they involve voluntary
risk-taking (e.g., gambling, investing).
Key Concept: Pure risk = loss or no loss; speculative risk = loss,
no loss, or gain.
Difficulty: Easy
Question 3. Which of the following is an example of risk
retention?
A) Purchasing a life insurance policy
B) A company setting aside funds to cover potential losses
Complete 200+ Questions with Verified Answers & Detailed
Rationales
INTRODUCTION
The California Life Insurance Agent Examination is administered
by PSI Exams and covers insurance principles, life insurance
products, annuities, California-specific regulations, and
consumer protection laws. Passing the exam enables
candidates to be licensed by the California Department of
Insurance to sell and service life insurance products. The Life-
Only Agent exam consists of 75 questions with a time limit
of 1.5 hours and requires a 60% passing score. The combined
Life, Accident, and Health Agent exam consists of 150
questions with a time limit of 3 hours.
EXAM DOMAINS
Domain Weight
General Insurance Concepts 15%
Life Insurance Basics & Types of Policies 15%
Policy Provisions, Riders, and Options 15%
,Domain Weight
California-Specific Regulations 15%
Annuities 10%
Life Insurance Planning & Business Uses 10%
Life Settlements 6%
Ethical Practices & Consumer Protection 14%
California Exam Facts to Know Before You Go:
• Minimum Passing Score: 60% (lower than some states,
but exams are comprehensive)
• Exam Time Limit: Life-Only = 1.5 hours; Life, Accident &
Health = 3 hours
• Exam Language Options: English, Spanish, Korean,
Simplified Chinese, Vietnamese, and Tagalog (as of July 1,
2024)
• Retake Limit: 10 attempts within 12 months (if failed 10
times, barred for 1 year)
• Minimum Age: 18 years
• Continuing Education: 24 hours every 2 years (includes 3
hours of ethics)
,SECTION 1: INSURANCE BASICS & RISK MANAGEMENT
Question 1. A non-admitted insurance company is best
defined as:
A) An insurer that has a Certificate of Authority from the
California Department of Insurance
B) An insurer that is not authorized to transact insurance in
California because it failed to comply with California
requirements or did not seek admission
C) An insurer that only sells life insurance products
D) An insurer that operates exclusively online
Correct Answer: B
Rationale: A non-admitted insurance company is not
authorized to transact insurance in California because it failed
to comply with California requirements or did not seek
admission from the California Department of Insurance (CDI).
Non-admitted insurers may still operate as surplus lines carriers
but are not subject to the same regulatory oversight as
admitted insurers.
Key Concept: Non-admitted = not authorized by CDI; admitted
= has Certificate of Authority.
Difficulty: Easy
, Question 2. What is the key difference between pure risk and
speculative risk?
A) Pure risks are always insurable; speculative risks are never
insurable
B) Pure risks involve the possibility of loss or no loss (no gain),
while speculative risks involve the possibility of loss, no loss, or
gain
C) Pure risks are voluntary; speculative risks are involuntary
D) Pure risks only apply to life insurance; speculative risks apply
to health insurance
Correct Answer: B
Rationale: Pure risks are insurable and involve only the
possibility of loss or no loss—there is no possibility for gain.
Speculative risks involve the possibility of loss, no loss, or gain
and are generally not insurable because they involve voluntary
risk-taking (e.g., gambling, investing).
Key Concept: Pure risk = loss or no loss; speculative risk = loss,
no loss, or gain.
Difficulty: Easy
Question 3. Which of the following is an example of risk
retention?
A) Purchasing a life insurance policy
B) A company setting aside funds to cover potential losses
