CA PSI SITE LIFE ACCIDENT AND HEALTH OR
SICKNESS EXAM (LIFE AGENT)
A participating company is also referred to as which type of
insurer? ...ANSWER...Mutual insurer
An insurer owned by its policyholders, is called a ...ANSWER...Mutual insurer
What is a participating life insurance policy? ...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? ...ANSWER...Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? ...ANSWER...Participating
Which of the following is not a characteristic of reinsurance? ...ANSWER...Increases the
unearned premium reserved
Which of the following is not a benefit of insurance? ...ANSWER...Losses due to fraud
are eliminated
When a mutual insurer becomes a stock company, the process is
called ...ANSWER...Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? ...ANSWER...Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
...ANSWER...Captive insurers
Which of the following is not considered to be a definition for the term
"loss"? ...ANSWER...Probability that an event will occur
Which of the following is not considered a definition of a risk? ...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"? ...ANSWER...Law of large
numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? ...ANSWER...Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or
gain? ...ANSWER...Speculative risk
Which of the following is any situation that presents the possibility of a
loss? ...ANSWER...Loss
An insurer having a large number of similar exposure units is considered important
because: ...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? ...ANSWER...Pure risk is the only
insurable risk
Which type of risk is gambling? ...ANSWER...Speculative risk
Moral hazard is described as the: ...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 ...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 ...ANSWER...Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue
coverage ...ANSWER...Reinstatement provision
In a life insurance policy, the entire contract consists of ...ANSWER...policy and
attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? ...ANSWER...Grace period
Which of the following is not a common life insurance policy
later? ...ANSWER...Extended term
What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? ...ANSWER...Policies, cash value is not affected
SICKNESS EXAM (LIFE AGENT)
A participating company is also referred to as which type of
insurer? ...ANSWER...Mutual insurer
An insurer owned by its policyholders, is called a ...ANSWER...Mutual insurer
What is a participating life insurance policy? ...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? ...ANSWER...Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? ...ANSWER...Participating
Which of the following is not a characteristic of reinsurance? ...ANSWER...Increases the
unearned premium reserved
Which of the following is not a benefit of insurance? ...ANSWER...Losses due to fraud
are eliminated
When a mutual insurer becomes a stock company, the process is
called ...ANSWER...Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? ...ANSWER...Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
...ANSWER...Captive insurers
Which of the following is not considered to be a definition for the term
"loss"? ...ANSWER...Probability that an event will occur
Which of the following is not considered a definition of a risk? ...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"? ...ANSWER...Law of large
numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? ...ANSWER...Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or
gain? ...ANSWER...Speculative risk
Which of the following is any situation that presents the possibility of a
loss? ...ANSWER...Loss
An insurer having a large number of similar exposure units is considered important
because: ...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? ...ANSWER...Pure risk is the only
insurable risk
Which type of risk is gambling? ...ANSWER...Speculative risk
Moral hazard is described as the: ...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 ...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 ...ANSWER...Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue
coverage ...ANSWER...Reinstatement provision
In a life insurance policy, the entire contract consists of ...ANSWER...policy and
attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? ...ANSWER...Grace period
Which of the following is not a common life insurance policy
later? ...ANSWER...Extended term
What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? ...ANSWER...Policies, cash value is not affected
