PSI CA Life, Accident, and Health License Exam
2025\\PSI CA Life, Accident & Health License
Exam 2025 – Complete Study Guide
As a life insurance agent, you know that when courts evaluate a contract to determine the parties'
intentions, they take into account specific documents. Which documents are considered in this
process?
Entire contract and application
According to the California Insurance Code, what is "insurance"?
A contract
In a life insurance contract, what term describes the combined policy and application as a
comprehensive agreement between the policyowner and the insurer?
Entire Contract Provison
Which whole life policy premium type is the most common?
continuous premium
All life insurance and health insurance contracts contain all of the following EXCEPT
Representations
An insurer that has been found using higher rates based on race,religion, or ethnicity is said to be
engaging in
unfair discrimination
The California Insurance Code defines "policy" as a(n)
written contract
what is the definition of premium?
Money an insured pays an insurer to obtain the benefits provided in the policy.
What is the primary source of information used by insurers to assess risk and determine premiums in
life, accident, and health insurance?
Application
How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance?
An "admitted" person has the right to transact insurance business within the state, while a
"nonadmitted" person is not entitled to this action.
,As a broker, you are assisting your client in finding appropriate insurance coverage. In order to ensure
that the company offering the insurance is authorized to do so in their state, you should look for a(an)
admitted insurer.
An insurer entitled to transact business by complying with the California Insurance Code is known as
a:
admitted insurer.
A Canadian insurer that benefits shareholders and is approved to operate in a U.S. state would be
classified as which type of insurer?
Admitted Alien Stock Company
Which is the difference between participating and non-participating policies?
Participating policies pay dividends while non-participating policies do not.
John owns an insurance company that gives him the right to share and then share surplus. What kind
of policy is this?
Participating
When a mutual insurer becomes a stock company, the process is called
Demutualization
A person who asserts a right of recovery under an insurance policy is called a
claimant
In California, an insurer organized under the state laws of Oregon is called a(n)
foreign insurer
Under the California Insurance Code, a licensee's license number must be printed at what size on all
price quotes, business cards, and printed material?
The same size print as the licensee's phone number, fax number or address
As an insurance agent, you are convicted of a crime involving dishonesty or breach of trust. To
continue working in the industry, you must obtain written consent from an insurance regulatory
official according to which federal law?
18 USC Sections 1033 and 1034
According to the California insurance code, the commissioner can disapprove a licensee's request to
use a fictitious name for any of the following reasons EXCEPT that the
name is the licensee's actual name
all of the following are requirements of contract EXCEPT
there must be equal consideration between the parties
,If an insurer must have its rates accepted by the insurance Department prior to using them, the
insurer would be operating in which of the following types of jurisdictions?
prior approval
it is federal offense for an insurance agent to do all of the following EXCEPT
misrepresent facts on an insurance application
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial
statement?
annually
According to the California Insurance Code, what is the maximum penalty per violation for anyone
who unwilfully commits an unfair method of competition?
$5,000
Section 1729.2 of the California Insurance Code requires insurance producer applications and licensees
to notify the Insurance Commissioner in writing, within ___days of charges in background information
after an application has been submitted or a license has been issued.
30
How long must life agents keep the transaction records?
5 years
What is required after a life agent sells an insurance policy to an applicant without being appointed by
the insurer?
Notice of appointment must be submitted to the Commissioner
Anyone employed in California to assist an insurance agent in transacting insurance is called an
insurance
solicitor
The California insurance code has authorized standards for names used by life insurance agents.
Which of the following, if any, are automatically acceptable for Lance Manyon, a holder of the CLU
designation?
Lance Manyon, CLU
As authorized by the California Insurance Code, the Insurance Commissioner has provided standards
for names used by life insurance agents. Under these standards which, if any, of the following are
automatically acceptable for Mary Brown, a holder of the CLU designation?
Mary Brown, CLU Insurance services
according to the California insurance code, if an insurer's certificate of authority is revoked, the
Commissioner can proceed with any of the following EXCEPT
, using Guarantee Funds to pay salaries
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Fiduciary misappropriation
According to the California Insurance Code, how is the word "may" interpreted?
permissive
Which of the following does the California Insurance Code NOT require an insurance policy to specify?
insurer's financial rating
What does the term "illustration" mean when used in the phrase "life insurance policy illustration",
according to the California Insurance Code?
Presentation of policy features that includes non-guaranteed elements
The California Life and Health Insurance Guarantee Association covers all of these types of policies
EXCEPT
Self-funded plans
An agent has advertised that the insurer to which the agent is appointed with is a member of the
Insurance Guarantee Association. This agent has committed a(n)
unfair method of competition
Which of the following acts is NOT a Federal offense committed by an insurance agent?
Misrepresentation on an insurance application
All of the following are classifications of risk EXCEPT
non-nicotine
An agent's attempt to stop the replacement of an existing life insurance policy is known as
conservation
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?
fiduciary
if you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged
pursuant to California Penal Code Section 1203.4, which of the following is true
event though your misdemeanor conviction was expunge, you must still disclose conviction on your
individual application for an insurance license
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?
2025\\PSI CA Life, Accident & Health License
Exam 2025 – Complete Study Guide
As a life insurance agent, you know that when courts evaluate a contract to determine the parties'
intentions, they take into account specific documents. Which documents are considered in this
process?
Entire contract and application
According to the California Insurance Code, what is "insurance"?
A contract
In a life insurance contract, what term describes the combined policy and application as a
comprehensive agreement between the policyowner and the insurer?
Entire Contract Provison
Which whole life policy premium type is the most common?
continuous premium
All life insurance and health insurance contracts contain all of the following EXCEPT
Representations
An insurer that has been found using higher rates based on race,religion, or ethnicity is said to be
engaging in
unfair discrimination
The California Insurance Code defines "policy" as a(n)
written contract
what is the definition of premium?
Money an insured pays an insurer to obtain the benefits provided in the policy.
What is the primary source of information used by insurers to assess risk and determine premiums in
life, accident, and health insurance?
Application
How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance?
An "admitted" person has the right to transact insurance business within the state, while a
"nonadmitted" person is not entitled to this action.
,As a broker, you are assisting your client in finding appropriate insurance coverage. In order to ensure
that the company offering the insurance is authorized to do so in their state, you should look for a(an)
admitted insurer.
An insurer entitled to transact business by complying with the California Insurance Code is known as
a:
admitted insurer.
A Canadian insurer that benefits shareholders and is approved to operate in a U.S. state would be
classified as which type of insurer?
Admitted Alien Stock Company
Which is the difference between participating and non-participating policies?
Participating policies pay dividends while non-participating policies do not.
John owns an insurance company that gives him the right to share and then share surplus. What kind
of policy is this?
Participating
When a mutual insurer becomes a stock company, the process is called
Demutualization
A person who asserts a right of recovery under an insurance policy is called a
claimant
In California, an insurer organized under the state laws of Oregon is called a(n)
foreign insurer
Under the California Insurance Code, a licensee's license number must be printed at what size on all
price quotes, business cards, and printed material?
The same size print as the licensee's phone number, fax number or address
As an insurance agent, you are convicted of a crime involving dishonesty or breach of trust. To
continue working in the industry, you must obtain written consent from an insurance regulatory
official according to which federal law?
18 USC Sections 1033 and 1034
According to the California insurance code, the commissioner can disapprove a licensee's request to
use a fictitious name for any of the following reasons EXCEPT that the
name is the licensee's actual name
all of the following are requirements of contract EXCEPT
there must be equal consideration between the parties
,If an insurer must have its rates accepted by the insurance Department prior to using them, the
insurer would be operating in which of the following types of jurisdictions?
prior approval
it is federal offense for an insurance agent to do all of the following EXCEPT
misrepresent facts on an insurance application
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial
statement?
annually
According to the California Insurance Code, what is the maximum penalty per violation for anyone
who unwilfully commits an unfair method of competition?
$5,000
Section 1729.2 of the California Insurance Code requires insurance producer applications and licensees
to notify the Insurance Commissioner in writing, within ___days of charges in background information
after an application has been submitted or a license has been issued.
30
How long must life agents keep the transaction records?
5 years
What is required after a life agent sells an insurance policy to an applicant without being appointed by
the insurer?
Notice of appointment must be submitted to the Commissioner
Anyone employed in California to assist an insurance agent in transacting insurance is called an
insurance
solicitor
The California insurance code has authorized standards for names used by life insurance agents.
Which of the following, if any, are automatically acceptable for Lance Manyon, a holder of the CLU
designation?
Lance Manyon, CLU
As authorized by the California Insurance Code, the Insurance Commissioner has provided standards
for names used by life insurance agents. Under these standards which, if any, of the following are
automatically acceptable for Mary Brown, a holder of the CLU designation?
Mary Brown, CLU Insurance services
according to the California insurance code, if an insurer's certificate of authority is revoked, the
Commissioner can proceed with any of the following EXCEPT
, using Guarantee Funds to pay salaries
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Fiduciary misappropriation
According to the California Insurance Code, how is the word "may" interpreted?
permissive
Which of the following does the California Insurance Code NOT require an insurance policy to specify?
insurer's financial rating
What does the term "illustration" mean when used in the phrase "life insurance policy illustration",
according to the California Insurance Code?
Presentation of policy features that includes non-guaranteed elements
The California Life and Health Insurance Guarantee Association covers all of these types of policies
EXCEPT
Self-funded plans
An agent has advertised that the insurer to which the agent is appointed with is a member of the
Insurance Guarantee Association. This agent has committed a(n)
unfair method of competition
Which of the following acts is NOT a Federal offense committed by an insurance agent?
Misrepresentation on an insurance application
All of the following are classifications of risk EXCEPT
non-nicotine
An agent's attempt to stop the replacement of an existing life insurance policy is known as
conservation
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?
fiduciary
if you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged
pursuant to California Penal Code Section 1203.4, which of the following is true
event though your misdemeanor conviction was expunge, you must still disclose conviction on your
individual application for an insurance license
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?
