CA PSI Site - Life, Accident and Health Agent Examination question with correct answers.

CA PSI Site - Life, Accident and Health
Agent Examination question with
correct answers
AnHadmittedHinsuranceHcompanyHisHauthorizedHtoHtransactHinsuranceHinHCaliforniaHbecau
seHitHhasHaHCertificateHofHAuthorityHgrantedHbyHtheHCaliforniaHDepartmentHofHInsuranceH(C
DI)

AHnon-
admittedHinsuranceHcompanyHisHnotHauthorizedHtoHtransactHinsuranceHinHCaliforniaHbecau
seHofHfailingHtoHcomplyHwithHCaliforniaHrequirementsHorHdidHnotHseekHadmissionH-
HCORRECTHANSWER-AdmittedHInsuranceHCompanyHvs.HNon-

AdmittedHInsuranceHCompany

PureHrisksHareHinsurableHbutHSpeculativeHrisksHareHnot

PureHRisksH-HAHpossibilityHofHloss,HnoHloss,HorHgain

PureHRiskH-HAHpossibilityHofHlossHorHnoHloss;HthereHisHnoHpossibilityHforHgainH-
HCORRECTHANSWER-PureHRiskHvs.HSpeculativeHRisk




OneHpartyHwritesHtheHcontractHwithoutHinoutHfromHtheHotherHpartyHonHaH"take-it-or-leave-
it"HbasisH-HCORRECTHANSWER-ContractHofHAdhesion

TheHexchangeHofHvalueHisHunequal.

Insured'sHpremiumHpaymentHisHlessHthanHtheHpotentialHbenefitHtoHbeHreceivedHinHtheHevent
HofHaHloss.H-HCORRECTHANSWER-AleatoryHContract




AnHagreementHtoHpayHonHbehalfHofHanotherHpartyHunderHspecifiedHcircumstancesH-
HCORRECTHANSWER-IndemnityHContract




OnlyHoneHpartyHisHlegallyHboundHtoHtheHcontractualHobligationsHafterHtheHpremiumHisHpaidHt
oHtheHinsurer

OnlyHtheHinsurerHmakesHaHpromiseHofHfutureHperformance,HandHonlyHtheHinsurerHcanHbeHc
hargedHwithHbreachHofHcontractH-HCORRECTHANSWER-UnilateralHContract

1)HCompetentHParties
2)HLegalHPurpose
3)HAgreementH(offerHandHacceptance)
4)HConsiderationH-HCORRECTHANSWER-4HelementsHofHaHvalidHcontract

,StandardHRisksHareHindividualsHwhoHhaveHtheHsameHhealth,Hhabits,Hsex/gender,HandHocc
upationalHcharacteristicsHasHthoseHreflectedHinHtheHmortalityHtable

PreferredHRisksHareHindividualsHwhoHmeetHcertainHrequirementsHandHqualifyHforHlowerHpre
miumsHbecauseHofHidealHhealth,HheightHandHweight.HIndividualsHinHthisHcategoryHhaveHaHlo
ngerHthanHaverageHlifeHexpectancyH-HCORRECTHANSWER-
PreferredHRisksHvsHStandardHRisks

HumanHLifeHValueHapproachHisHaHmeasureHofHtheHprojectedHfutureHearningsHandHservices
HofHaHpersonHatHriskHinHtheHeventHofHaHprematureHdeath.H




TheHobjectiveHisHtoHprovideHtheHproperHamountHofHcoverageHasHdeterminedHbyHtheHvalueH
ofHtheHindividualHtoHhis/herHdependentsHusingHtheHfollowingHfactors:
-HTheHindividual'sHageHandHgender
-HTheHindividual'sHoccupation,HannualHwage,HandHplannedHretirementHage
-HInflation


NeedsHAnalysisHApproachHdeterminesHaHneedHforHcoverageHuponHtheHprematureHdeathHo
fHanHindividual.H

ItHalwaysHassumesHtheHdeathHofHtheHindividualHtoHbeHimmediateHandHfactorsHtheHfollowingH
stepsHintoHarrivingHatHtheHproperHamountHofHcoverageHneeded:
-
HCalculateHallHfinancialHneedsHcausedHbyHimmediateHdeath,HincludingHdebts,HmedicalHbills,

HandHfinalHexpenses

-HProvideHlifetimeHincomeHtoHtheHspouse
-HPayHoffHmortgageHorHotherHdebts
-HProvideHfundsHforHchildren'sHeducation
-HSubtractsHanyHassetsHavailableHtoHfundH-HCORRECTHANSWER-
HumanHLifeHValueHApproachHvs.HNeedsHAnalysisHApproach

LifeHInsuranceHDisabilityHRider

IfHtheHinsuredHbecomesHtotallyHdisabled,HtheHinsurerHwillHwaiveHpremiumsHforHtheHduration
HofHtheHdisabilityHorHtheHendHofHtheHpolicy,HwhicheverHoccursHfirst.




ToHqualifyHforHtheHwaiver,HtheHinsuredHmustHbeHdisabledHforHaHwaitingHperiodHofH3-
6Hmonths.
TheHpolicyownerHmustHcontinueHtoHpayHpremiumsHduringHtheHwaitingHperiod,HbutHonceHeli
gible,HtheHwaiverHisHretroactiveHtoHtheHstartHofHtheHdisabilityHandHtheHpremiumsHwillHbeHrefu
nded.
DuringHtheHdisability,HtheHinsuredHwillHcreditHtheHpremiumsHtoHtheHpolicyHandHallHbenefits,Hs
uchHasHcashHvalueHaccumulationHandHdividendHpayments,HwillHcontinue.H-
HCORRECTHANSWER-WaiverHofHPremium

, LifeHInsuranceHDisabilityHRider

InHtheHeventHofHtotalHdisabilityHandHafterHtheHinitialHwaitingHperiodH(suchHasH6Hmonths),Hpre
miumsHareHwaivedHandHtheHinsuredHisHpaidHaHmonthlyHincome.

TheHmonthlyHdisabilityHincomeHbenefitHisHtypicallyHlimitedHtoHaHpercentageHofHtheHfaceHval
ue.
TheHbenefitHpaidHfromHtheHriderHdoesHnotHreduceHtheHdeathHbenefitsHpaidHoutHuponHdeath.
H-HCORRECTHANSWER-DisabilityHIncomeHRider




LifeHInsuranceHRiderHaffectingHtheHdeathHbenefitHamount

MayHbeHcalledHmultipleHindemnityHrider

InHtheHeventHofHaHclaim,HtheHpolicyHnormallyHpaysHdoubleHorHtripleHtheHfaceHamountHonlyHifH
theHinsured'sHdeathHwasHaHresultHofHanHaccident.

TheHbenefitHisHpayableHonlyHifHdeathHoccursHbeforeHaHspecificHageHandHwithinH90HdaysHofHt
heHaccidentH-HCORRECTHANSWER-AccidentalHDeathHBenefitHrider

TheHseparateHaccountHisHinvestedHinHdebtHorHequityHsecuritiesHasHofferedHbyHtheHinsuranc
eHcompany.
oHBothHtheHcashHvalueHinHtheHseparateHaccountHandHtheHdeathHbenefitHwillHfluctuateHbase
dHonHmarketHconditionsHandHperformanceHofHtheHsubaccounts.
oHThereHisHnoHguaranteedHminimumHreturnHonHtheHcashHvalueHinHtheHseparateHaccountHan
dHtheHpolicyHmayHloseHbothHcashHvalueHandHdeathHbenefitHifHthereHareHmarketHlosses.
oHTheHdeathHbenefitHisHrecalculatedHannually.

TheHgeneralHaccountHprovidesHaHfixedHrateHofHinterestHandHtheHcashHvalueHinHtheHgeneralH
accountHprovidesHforHaHguaranteedHminimumHdeathHbenefit.H-HCORRECTHANSWER-
SeparateHAccountH(Variable)HvsHGeneralHAccountH(LifeHInsurance)

AnHagreementHbetweenHaHpolicyownerHandHaHthird-
partyHbuyerHtoHpurchaseHtheHlifeHpolicyHcoveringHaHpersonHwhoHisHdiagnosedHasHterminall
yHillHwithHlessHthanH24HmonthsHremainingHlifeHexpectancy.H-HCORRECTHANSWER-
ViaticalHSettlement

ToHindemnifyHmeansHtoHrestoreHaHperson,HinHwholeHorHinHpart,HtoHtheHsameHphysicalHorHfin
ancialHconditionHwhichHexistedHpriorHtoHaHloss,HbutHwithoutHprofitHorHgain.H

InHlifeHandHhealthHinsurance,HitHmayHnotHbeHpossibleHtoHtrulyHindemnifyHaHpersonHforHallHlos
ses.H
oHInstead,HindemnityHtakesHtheHformHofHcashH(aHdeathHorHdisabilityHincomeHbenefit)HorHpay
mentsHtoHphysiciansHorHhospitalsHforHcareHandHservicesHprovidedHtoHanHinsuredHwhoHisHinj
uredHorHill.H-HCORRECTHANSWER-PrincipleHofHIndemnity