California Life Insurance PSI
Exam – Real Exam Questions &
Answers 2025
A participating company is also referred to as which type of insurer? - ANSWER ✨✔---Mutual
insurer
An insurer owned by its policyholders, is called a - ANSWER ✨✔---Mutual insurer
What is a participating life insurance policy? - ANSWER ✨✔---Contract that allows the policyowner
to receive a share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from insurance policies
it issues. What is this agreement called? - ANSWER ✨✔---Reinsurance
,John owns an insurance company that gives him the right to share and then sure surplus. What kind of
policy is this? - ANSWER ✨✔---Participating
Which of the following is not a characteristic of reinsurance? - ANSWER ✨✔---Increases the
unearned premium reserved
Which of the following is not a benefit of insurance? - ANSWER ✨✔---Losses due to fraud are
eliminated
When a mutual insurer becomes a stock company, the process is called - ANSWER ✨✔---
Demutualization
Which of the following is a contract that involves one party which indemnifies another one a loss arises
from an unknown event? - ANSWER ✨✔---Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's? -
ANSWER ✨✔---Captive insurers
Which of the following is not considered to be a definition for the term "loss"? - ANSWER ✨✔---
Probability that an event will occur
Which of the following is not considered a definition of a risk? - ANSWER ✨✔---The cause of loss
Which of the following best describes the statement; " the more times, and event is repeated, the more
predictable the outcome becomes"? - ANSWER ✨✔---Law of large numbers
Which of the following would not be accomplished with the purchase of an insurance policy? -
ANSWER ✨✔---Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
ANSWER ✨✔---Speculative risk
, Which of the following is any situation that presents the possibility of a loss? - ANSWER ✨✔---Loss
An insurer having a large number of similar exposure units is considered important because: -
ANSWER ✨✔---the greater the number insured, the more accurately that is her can predict losses
& set appropriate premiums
Which of these statements correctly describes risks? - ANSWER ✨✔---Pure risk is the only
insurable risk
Which type of risk is gambling? - ANSWER ✨✔---Speculative risk
Moral hazard is described as the: - ANSWER ✨✔---increased chance of a loss because of an
insured's dishonest tendencies
All of the following circumstances must be met for los retention to be an effective, risk management
technique, except - ANSWER ✨✔---Probability of loss is unknown
All of the following circumstances must be met for lost attention to be an effective risk management
technique, except - ANSWER ✨✔---Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage - ANSWER ✨✔---
Reinstatement provision
In a life insurance policy, the entire contract consists of - ANSWER ✨✔---policy and attached
application
Which policy provision protects the policy owner from unintentional lapse of the contract? -
ANSWER ✨✔---Grace period
Which of the following is not a common life insurance policy later? - ANSWER ✨✔---Extended term
Exam – Real Exam Questions &
Answers 2025
A participating company is also referred to as which type of insurer? - ANSWER ✨✔---Mutual
insurer
An insurer owned by its policyholders, is called a - ANSWER ✨✔---Mutual insurer
What is a participating life insurance policy? - ANSWER ✨✔---Contract that allows the policyowner
to receive a share of surplus in the form of policy dividends
An insurer enter into a contract with a third-party to ensure itself against losses from insurance policies
it issues. What is this agreement called? - ANSWER ✨✔---Reinsurance
,John owns an insurance company that gives him the right to share and then sure surplus. What kind of
policy is this? - ANSWER ✨✔---Participating
Which of the following is not a characteristic of reinsurance? - ANSWER ✨✔---Increases the
unearned premium reserved
Which of the following is not a benefit of insurance? - ANSWER ✨✔---Losses due to fraud are
eliminated
When a mutual insurer becomes a stock company, the process is called - ANSWER ✨✔---
Demutualization
Which of the following is a contract that involves one party which indemnifies another one a loss arises
from an unknown event? - ANSWER ✨✔---Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's? -
ANSWER ✨✔---Captive insurers
Which of the following is not considered to be a definition for the term "loss"? - ANSWER ✨✔---
Probability that an event will occur
Which of the following is not considered a definition of a risk? - ANSWER ✨✔---The cause of loss
Which of the following best describes the statement; " the more times, and event is repeated, the more
predictable the outcome becomes"? - ANSWER ✨✔---Law of large numbers
Which of the following would not be accomplished with the purchase of an insurance policy? -
ANSWER ✨✔---Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
ANSWER ✨✔---Speculative risk
, Which of the following is any situation that presents the possibility of a loss? - ANSWER ✨✔---Loss
An insurer having a large number of similar exposure units is considered important because: -
ANSWER ✨✔---the greater the number insured, the more accurately that is her can predict losses
& set appropriate premiums
Which of these statements correctly describes risks? - ANSWER ✨✔---Pure risk is the only
insurable risk
Which type of risk is gambling? - ANSWER ✨✔---Speculative risk
Moral hazard is described as the: - ANSWER ✨✔---increased chance of a loss because of an
insured's dishonest tendencies
All of the following circumstances must be met for los retention to be an effective, risk management
technique, except - ANSWER ✨✔---Probability of loss is unknown
All of the following circumstances must be met for lost attention to be an effective risk management
technique, except - ANSWER ✨✔---Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage - ANSWER ✨✔---
Reinstatement provision
In a life insurance policy, the entire contract consists of - ANSWER ✨✔---policy and attached
application
Which policy provision protects the policy owner from unintentional lapse of the contract? -
ANSWER ✨✔---Grace period
Which of the following is not a common life insurance policy later? - ANSWER ✨✔---Extended term
