CA PSI SITE - LIFE, ACCIDENT AND
HEALTH OR SICKNESS EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS LATEST VERSION 2025/2026.
What is considered to be the primary reason for buying life insurance?
Provide death benefits
Provide living benefits
Provide money for college
Provide money for retirement - ANS Provide death benefits
Which of the following is NOT considered advertising?
An illustration
A sales presentation
Direct mailing from an agency
A rating from a rating service company, such as A.M. Best - ANS A rating from a rating service
company, such as A.M. Best
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A type of insurer that is owned by its policyowners is called
stock
domestic
in-house
mutual - ANS mutual
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called
conservation
reciprocity
reinsurance
risk transfer - ANS reinsurance
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus?
straight life insurance policy
nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy - ANS participating life insurance policy
A nonparticipating policy will
provide tax advantages
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,provide a return of premium
give policyowners special privileges
not pay dividends - ANS not pay dividends
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for
this?
$15,000
$0
$10,000
$5,000 - ANS $10,000
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
political organizations
surveys
charities
insurance sales calls - ANS insurance sales calls
The Fair Credit and Reporting Act's main purpose is to
protect insurers from an applicant's misrepresentation
assist in the underwriting of insurance policies
assist an insurer in determining an applicant's creditworthiness
protect consumers with guidelines regarding credit reporting and distribution - ANS protect
consumers with guidelines regarding credit reporting and distribution
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Why are dividends from a mutual insurer not subject to taxation?
Because dividends are considered to be a return of premium
Because dividends are already subject to capital gains
Because dividends are payable directly to the policyholder
Because insurance premiums are tax-deductible - ANS Because dividends are considered to
be a return of premium
All of the following are examples of pure risk EXCEPT
Injured while playing football
Falling at a casino and breaking a hip
Jewelry stolen during a home robbery
Losing money at a casino - ANS Losing money at a casino
How do insurers predict the increase of individual risks?
Law of large numbers
Average mortality incidents
U.S. Census
Experience of morbidity - ANS Law of large numbers
What is known as the immediate specific event causing loss and giving rise to risk?
Hazard
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
HEALTH OR SICKNESS EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS LATEST VERSION 2025/2026.
What is considered to be the primary reason for buying life insurance?
Provide death benefits
Provide living benefits
Provide money for college
Provide money for retirement - ANS Provide death benefits
Which of the following is NOT considered advertising?
An illustration
A sales presentation
Direct mailing from an agency
A rating from a rating service company, such as A.M. Best - ANS A rating from a rating service
company, such as A.M. Best
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,A type of insurer that is owned by its policyowners is called
stock
domestic
in-house
mutual - ANS mutual
ABC Insurance Company transfers part of their risk to XYZ Insurance Company. This situation is
called
conservation
reciprocity
reinsurance
risk transfer - ANS reinsurance
What kind of life insurance policy issued by a mutual insurer provides a return of divisible
surplus?
straight life insurance policy
nonparticipating life insurance policy
participating life insurance policy
divisible surplus life insurance policy - ANS participating life insurance policy
A nonparticipating policy will
provide tax advantages
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,provide a return of premium
give policyowners special privileges
not pay dividends - ANS not pay dividends
Karen is a producer who has obtained personal information about a client without having a
legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for
this?
$15,000
$0
$10,000
$5,000 - ANS $10,000
The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT
political organizations
surveys
charities
insurance sales calls - ANS insurance sales calls
The Fair Credit and Reporting Act's main purpose is to
protect insurers from an applicant's misrepresentation
assist in the underwriting of insurance policies
assist an insurer in determining an applicant's creditworthiness
protect consumers with guidelines regarding credit reporting and distribution - ANS protect
consumers with guidelines regarding credit reporting and distribution
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, Why are dividends from a mutual insurer not subject to taxation?
Because dividends are considered to be a return of premium
Because dividends are already subject to capital gains
Because dividends are payable directly to the policyholder
Because insurance premiums are tax-deductible - ANS Because dividends are considered to
be a return of premium
All of the following are examples of pure risk EXCEPT
Injured while playing football
Falling at a casino and breaking a hip
Jewelry stolen during a home robbery
Losing money at a casino - ANS Losing money at a casino
How do insurers predict the increase of individual risks?
Law of large numbers
Average mortality incidents
U.S. Census
Experience of morbidity - ANS Law of large numbers
What is known as the immediate specific event causing loss and giving rise to risk?
Hazard
4 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
