CA PSI Site - Life, Accident and Health Agent Examination (Life Agen
CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
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1. Admitted Insurance Company vs. Non-Admit- An admitted insurance company is au-
ted Insurance Company thorized to transact insurance in Cal-
ifornia because it has a Certificate of
Authority granted by the California De-
partment of Insurance (CDI)
A non-admitted insurance company is
not authorized to transact insurance in
California because of failing to comply
with California requirements or did not
seek admission
2. Pure Risk vs. Speculative Risk Pure risks are insurable but Specula-
tive risks are not
Pure Risks - A possibility of loss, no
loss, or gain
Pure Risk - A possibility of loss or no
loss; there is no possibility for gain
3. Contract of Adhesion One party writes the contract with-
out inout from the other party on a
"take-it-or-leave-it" basis
4. Aleatory Contract The exchange of value is unequal.
Insured's premium payment is less
than the potential benefit to be re-
ceived in the event of a loss.
5. Indemnity Contract
, CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
An agreement to pay on behalf of an-
other party under specified circum-
stances
6. Unilateral Contract Only one party is legally bound to the
contractual obligations after the pre-
mium is paid to the insurer
Only the insurer makes a promise of
future performance, and only the in-
surer can be charged with breach of
contract
7. 4 elements of a valid contract 1) Competent Parties
2) Legal Purpose
3) Agreement (offer and acceptance)
4) Consideration
8. Preferred Risks vs Standard Risks Standard Risks are individuals who
have the same health, habits, sex/gen-
der, and occupational characteristics
as those reflected in the mortality
table
Preferred Risks are individuals who
meet certain requirements and qualify
for lower premiums because of ideal
health, height and weight. Individuals
in this category have a longer than av-
erage life expectancy
9. Human Life Value Approach vs. Needs Analy- Human Life Value approach is a mea-
sis Approach sure of the projected future earnings
,CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
and services of a person at risk in the
event of a premature death.
The objective is to provide the proper
amount of coverage as determined by
the value of the individual to his/her
dependents using the following fac-
tors:
- The individual's age and gender
- The individual's occupation, annual
wage, and planned retirement age
- Inflation
Needs Analysis Approach determines a
need for coverage upon the premature
death of an individual.
It always assumes the death of the in-
dividual to be immediate and factors
the following steps into arriving at the
proper amount of coverage needed:
- Calculate all financial needs caused
by immediate death, including debts,
medical bills, and final expenses
- Provide lifetime income to the
spouse
- Pay off mortgage or other debts
- Provide funds for children's educa-
tion
- Subtracts any assets available to fund
financial needs after death (such as re-
, CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
tirement plan, other insurance, liquid
investments, separate savings)
10. Waiver of Premium Life Insurance Disability Rider
If the insured becomes totally dis-
abled, the insurer will waive premiums
for the duration of the disability or
the end of the policy, whichever occurs
first.
To qualify for the waiver, the insured
must be disabled for a waiting period
of 3-6 months.
The policyowner must continue to pay
premiums during the waiting period,
but once eligible, the waiver is retroac-
tive to the start of the disability and the
premiums will be refunded.
During the disability, the insured will
credit the premiums to the policy and
all benefits, such as cash value accu-
mulation and dividend payments, will
continue.
11. Disability Income Rider Life Insurance Disability Rider
In the event of total disability and af-
ter the initial waiting period (such as
6 months), premiums are waived and
the insured is paid a monthly income.
The monthly disability income benefit
CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
EXAM 2025 UPDATE Verified Questions And Answers | Guaranteed
Study online at https://quizlet.com/_4z2i2s
Success!!
1. Admitted Insurance Company vs. Non-Admit- An admitted insurance company is au-
ted Insurance Company thorized to transact insurance in Cal-
ifornia because it has a Certificate of
Authority granted by the California De-
partment of Insurance (CDI)
A non-admitted insurance company is
not authorized to transact insurance in
California because of failing to comply
with California requirements or did not
seek admission
2. Pure Risk vs. Speculative Risk Pure risks are insurable but Specula-
tive risks are not
Pure Risks - A possibility of loss, no
loss, or gain
Pure Risk - A possibility of loss or no
loss; there is no possibility for gain
3. Contract of Adhesion One party writes the contract with-
out inout from the other party on a
"take-it-or-leave-it" basis
4. Aleatory Contract The exchange of value is unequal.
Insured's premium payment is less
than the potential benefit to be re-
ceived in the event of a loss.
5. Indemnity Contract
, CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
An agreement to pay on behalf of an-
other party under specified circum-
stances
6. Unilateral Contract Only one party is legally bound to the
contractual obligations after the pre-
mium is paid to the insurer
Only the insurer makes a promise of
future performance, and only the in-
surer can be charged with breach of
contract
7. 4 elements of a valid contract 1) Competent Parties
2) Legal Purpose
3) Agreement (offer and acceptance)
4) Consideration
8. Preferred Risks vs Standard Risks Standard Risks are individuals who
have the same health, habits, sex/gen-
der, and occupational characteristics
as those reflected in the mortality
table
Preferred Risks are individuals who
meet certain requirements and qualify
for lower premiums because of ideal
health, height and weight. Individuals
in this category have a longer than av-
erage life expectancy
9. Human Life Value Approach vs. Needs Analy- Human Life Value approach is a mea-
sis Approach sure of the projected future earnings
,CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
and services of a person at risk in the
event of a premature death.
The objective is to provide the proper
amount of coverage as determined by
the value of the individual to his/her
dependents using the following fac-
tors:
- The individual's age and gender
- The individual's occupation, annual
wage, and planned retirement age
- Inflation
Needs Analysis Approach determines a
need for coverage upon the premature
death of an individual.
It always assumes the death of the in-
dividual to be immediate and factors
the following steps into arriving at the
proper amount of coverage needed:
- Calculate all financial needs caused
by immediate death, including debts,
medical bills, and final expenses
- Provide lifetime income to the
spouse
- Pay off mortgage or other debts
- Provide funds for children's educa-
tion
- Subtracts any assets available to fund
financial needs after death (such as re-
, CA PSI Site - Life, Accident and Health Agent Examination (Life Agent)
Study online at https://quizlet.com/_4z2i2s
tirement plan, other insurance, liquid
investments, separate savings)
10. Waiver of Premium Life Insurance Disability Rider
If the insured becomes totally dis-
abled, the insurer will waive premiums
for the duration of the disability or
the end of the policy, whichever occurs
first.
To qualify for the waiver, the insured
must be disabled for a waiting period
of 3-6 months.
The policyowner must continue to pay
premiums during the waiting period,
but once eligible, the waiver is retroac-
tive to the start of the disability and the
premiums will be refunded.
During the disability, the insured will
credit the premiums to the policy and
all benefits, such as cash value accu-
mulation and dividend payments, will
continue.
11. Disability Income Rider Life Insurance Disability Rider
In the event of total disability and af-
ter the initial waiting period (such as
6 months), premiums are waived and
the insured is paid a monthly income.
The monthly disability income benefit
