PSI LIFE INSURANCE EXAM |COMPLETE QUESTIONS WITH EXPERT
SOLUTIONS| 2026 LATEST UPDATED| A+
what is meant by referring to an insurance policy as a unilateral contract? - (answer)Only one
party makes a legally enforceable promise
when must insurance records of insurance agents and brokers be made available to the insurance
Commissioner - (answer)At all times
Any situation that presents the possibility of a loss is known as - (answer)A loss exposure
Which of the following information is not required to be communicated in a Life Insurance
contract? - (answer)Personal judgment
The direct distribution of insurance utilizes all of the following to promote the sale of insurance
EXCEPT - (answer)Telephone call from an agent
A contract in which one party promises to indemnify another against loss that arises from an
unknown even is - (answer)An insurance policy
,All of the occurrences listed below area examples of an insurable event as defined by the
California insurance Code EXCEPT - (answer)An insured suffers a financial loss in the stat
lottery
All of the following statements about aleatory contracts are true EXCEPT - (answer)The insured
and insurer contribute equally to the contract
All of the following would be considered unfair trade practices EXCEPT - (answer)Committing
any act of discrimination whether it be deemed fair or unfair
As authorized by the California Insurance Code, the Insurance Commissioner has provided
standard for names used by life insurance agents. Under these standards which, if any, of these
following are automatically acceptable for Mary Brown, a holder of the CLU designation? -
(answer)Mary Brown Insurance Services
A contract of indemnity is one in which - (answer)One party is restored to the same financial
position the party was in before the loss occurred
In insurance terminology, "indemnity" means - (answer)make whole
,As defined in the California Insurance Code, "Insurance" - (answer)is a contract
What would a person be guilty of who refuses to deliver any books, records, or assets to the
commissioner once a seizure order has been executed? - (answer)A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and health, or
bail agent acts in which capacity when handling premiums or return premiums for an insured? -
(answer)Fiduciary
Which of the following statement regarding risk id TRUE? - (answer)Only pure risks are
insurable
The purchase of an insurance polity may accomplish all of the following for the insured
EXCEPT - (answer)The elimination of risk
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the
principle of - (answer)Indemnity
What rule is used to determine the importance of a representation? - (answer)The materiality of
concealment
, The requred contents of a policy included all of the following EXCEPT - (answer)The
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - (answer)Increases the
unearned premium reserve
According to the California Insurance Code, an insurance policy must specify all of the
following EXCEPT the - (answer)Financial rating of the insurer
All of the following qualify as "background information" as defined in Section 1729.2 of the
California insurance Code EXCEPT - (answer)Misdemeanor changes filed, not resulting in a
conviction
Loss retention is an effective risk management technique when all of the following conditions
exist EXCEPT the - (answer)Probability of loss is unknown
A situation in which there is a possibility of loss or gain is a - (answer)Speculative risk
SOLUTIONS| 2026 LATEST UPDATED| A+
what is meant by referring to an insurance policy as a unilateral contract? - (answer)Only one
party makes a legally enforceable promise
when must insurance records of insurance agents and brokers be made available to the insurance
Commissioner - (answer)At all times
Any situation that presents the possibility of a loss is known as - (answer)A loss exposure
Which of the following information is not required to be communicated in a Life Insurance
contract? - (answer)Personal judgment
The direct distribution of insurance utilizes all of the following to promote the sale of insurance
EXCEPT - (answer)Telephone call from an agent
A contract in which one party promises to indemnify another against loss that arises from an
unknown even is - (answer)An insurance policy
,All of the occurrences listed below area examples of an insurable event as defined by the
California insurance Code EXCEPT - (answer)An insured suffers a financial loss in the stat
lottery
All of the following statements about aleatory contracts are true EXCEPT - (answer)The insured
and insurer contribute equally to the contract
All of the following would be considered unfair trade practices EXCEPT - (answer)Committing
any act of discrimination whether it be deemed fair or unfair
As authorized by the California Insurance Code, the Insurance Commissioner has provided
standard for names used by life insurance agents. Under these standards which, if any, of these
following are automatically acceptable for Mary Brown, a holder of the CLU designation? -
(answer)Mary Brown Insurance Services
A contract of indemnity is one in which - (answer)One party is restored to the same financial
position the party was in before the loss occurred
In insurance terminology, "indemnity" means - (answer)make whole
,As defined in the California Insurance Code, "Insurance" - (answer)is a contract
What would a person be guilty of who refuses to deliver any books, records, or assets to the
commissioner once a seizure order has been executed? - (answer)A misdemeanor
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and health, or
bail agent acts in which capacity when handling premiums or return premiums for an insured? -
(answer)Fiduciary
Which of the following statement regarding risk id TRUE? - (answer)Only pure risks are
insurable
The purchase of an insurance polity may accomplish all of the following for the insured
EXCEPT - (answer)The elimination of risk
Insureds are entitled to recover an amount NOT greater than the amount of their loss under the
principle of - (answer)Indemnity
What rule is used to determine the importance of a representation? - (answer)The materiality of
concealment
, The requred contents of a policy included all of the following EXCEPT - (answer)The
probability of loss
All of the following are characteristics of reinsurance EXCEPT it - (answer)Increases the
unearned premium reserve
According to the California Insurance Code, an insurance policy must specify all of the
following EXCEPT the - (answer)Financial rating of the insurer
All of the following qualify as "background information" as defined in Section 1729.2 of the
California insurance Code EXCEPT - (answer)Misdemeanor changes filed, not resulting in a
conviction
Loss retention is an effective risk management technique when all of the following conditions
exist EXCEPT the - (answer)Probability of loss is unknown
A situation in which there is a possibility of loss or gain is a - (answer)Speculative risk
