CA LIFE EXAM – PSI EXAM QUESTIONS WITH CORRECT ANSWERS RATED A+

CA LIFE EXAM – PSI EXAM QUESTIONS WITH
CORRECT ANSWERS RATED A+
ANparticipatingNcompanyNisNalsoNreferredNtoNasNwhichNtypeNofNinsurer?N-
NCORRECTNANSWERSMutualNinsurer




AnNinsurerNownedNbyNitsNpolicyholders,NisNcalledNaN-NCORRECTNANSWERSMutualNinsurer



WhatNisNaNparticipatingNlifeNinsuranceNpolicy?N-
NCORRECTNANSWERSContractNthatNallowsNtheNpolicyownerNtoNreceiveNaNshareNofNsurplusNinNtheNformNofN


policyNdividends



AnNinsurerNenterNintoNaNcontractNwithNaNthird-
partyNtoNensureNitselfNagainstNlossesNfromNinsuranceNpoliciesNitNissues.NWhatNisNthisNagreementNcalled?N-
NCORRECTNANSWERSReinsurance




JohnNownsNanNinsuranceNcompanyNthatNgivesNhimNtheNrightNtoNshareNandNthenNsureNsurplus.NWhatNkindNo
fNpolicyNisNthis?N-NCORRECTNANSWERSParticipating



WhichNofNtheNfollowingNisNnotNaNcharacteristicNofNreinsurance?N-
NCORRECTNANSWERSIncreasesNtheNunearnedNpremiumNreserved




WhichNofNtheNfollowingNisNnotNaNbenefitNofNinsurance?N-
NCORRECTNANSWERSLossesNdueNtoNfraudNareNeliminated




WhenNaNmutualNinsurerNbecomesNaNstockNcompany,NtheNprocessNisNcalledN-
NCORRECTNANSWERSDemutualization

,WhichNofNtheNfollowingNisNaNcontractNthatNinvolvesNoneNpartyNwhichNindemnifiesNanotherNoneNaNlossNaris
esNfromNanNunknownNevent?N-NCORRECTNANSWERSInsuranceNpolicy



WhichNofNtheNfollowingNisNanNinsurerNestablishedNbyNaNparentNcompany'sNlossNexposure's?N-
NCORRECTNANSWERSCaptiveNinsurers




WhichNofNtheNfollowingNisNnotNconsideredNtoNbeNaNdefinitionNforNtheNtermN"loss"?N-
NCORRECTNANSWERSProbabilityNthatNanNeventNwillNoccur




WhichNofNtheNfollowingNisNnotNconsideredNaNdefinitionNofNaNrisk?N-NCORRECTNANSWERSTheNcauseNofNloss



WhichNofNtheNfollowingNbestNdescribesNtheNstatement;N"NtheNmoreNtimes,NandNeventNisNrepeated,NtheNmo
reNpredictableNtheNoutcomeNbecomes"?N-NCORRECTNANSWERSLawNofNlargeNnumbers



WhichNofNtheNfollowingNwouldNnotNbeNaccomplishedNwithNtheNpurchaseNofNanNinsuranceNpolicy?N-
NCORRECTNANSWERSRiskNisNeliminated




WhichNofNtheNfollowingNisNaNsituationNwhereNthereNisNaNpossibilityNofNeitherNaNlossNorNgain?N-
NCORRECTNANSWERSSpeculativeNrisk




WhichNofNtheNfollowingNisNanyNsituationNthatNpresentsNtheNpossibilityNofNaNloss?N-
NCORRECTNANSWERSLoss




AnNinsurerNhavingNaNlargeNnumberNofNsimilarNexposureNunitsNisNconsideredNimportantNbecause:N-
NCORRECTNANSWERStheNgreaterNtheNnumberNinsured,NtheNmoreNaccuratelyNthatNisNherNcanNpredictNlosse


sN&NsetNappropriateNpremiums



WhichNofNtheseNstatementsNcorrectlyNdescribesNrisks?N-
NCORRECTNANSWERSPureNriskNisNtheNonlyNinsurableNrisk

, WhichNtypeNofNriskNisNgambling?N-NCORRECTNANSWERSSpeculativeNrisk



MoralNhazardNisNdescribedNasNthe:N-
NCORRECTNANSWERSincreasedNchanceNofNaNlossNbecauseNofNanNinsured'sNdishonestNtendencies




AllNofNtheNfollowingNcircumstancesNmustNbeNmetNforNlosNretentionNtoNbeNanNeffective,NriskNmanagementNt
echnique,NexceptN-NCORRECTNANSWERSProbabilityNofNlossNisNunknown



AllNofNtheNfollowingNcircumstancesNmustNbeNmetNforNlostNattentionNtoNbeNanNeffectiveNriskNmanagementNt
echnique,NexceptN-NCORRECTNANSWERSProbabilityNofNlossNisNunknown



AfterNaNpolicyNhasNlapsed,NwhichNprovisionNallowsNtheNinsurerNtoNcontinueNcoverageN-
NCORRECTNANSWERSReinstatementNprovision




InNaNlifeNinsuranceNpolicy,NtheNentireNcontractNconsistsNofN-
NCORRECTNANSWERSpolicyNandNattachedNapplication




WhichNpolicyNprovisionNprotectsNtheNpolicyNownerNfromNunintentionalNlapseNofNtheNcontract?N-
NCORRECTNANSWERSGraceNperiod




WhichNofNtheNfollowingNisNnotNaNcommonNlifeNinsuranceNpolicyNlater?N-
NCORRECTNANSWERSExtendedNterm




WhatNanNaccidentalNdeathNbenefitNisNaddedNtoNaNwholeNlifeNpolicy,NhowNdoesNthisNaffectNtheNpoliciesNcas
hNvalue?N-NCORRECTNANSWERSPolicies,NcashNvalueNisNnotNaffected



ANlifeNinsuranceNpolicyNcanNbeNsurrenderedNforNitsNcashNvalueNunderNwhichNpolicyNprovision?N-
NCORRECTNANSWERSNonforfeitureNoptions