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CA PSI SITE LIFE ACCIDENT AND HEALTH OR SICKNESS
EXAM (LIFE AGENT) 2025 EXAM WITH COMPLETE
QUESTIONS AND VERIFIED ANSWERS ||AWARDED A+||
Whole life - ANSWER-A life insurance policy that either pays the face value
upon the death of the insured or when the insured reaches age 100.
Modified endowment contract (MEC) - ANSWER-The result when a life
insurance policy exceeds certain IRS table values.
Child term rider - ANSWER-An insurance product that can cover the
children of someone covered by a whole life policy.
Key person insurance - ANSWER-A policy that an architecture firm should
purchase on its project manager to protect against financial loss due to
death.
Face amount plus cash value policy - ANSWER-A life insurance policy that
pays the face amount plus the policy's cash value upon the insured's death.
Variable insurance policy - ANSWER-A policy that does not guarantee a
return on its investment accounts.
Decreasing term life policy - ANSWER-A policy normally used when
covering an insured's mortgage balance.
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Fair Credit Reporting Act - ANSWER-The law that requires insurers to
disclose information gathering practices and where the information was
obtained.
Participating insurance policy - ANSWER-A policy where policyowners are
entitled to receive dividends.
Dividends - ANSWER-Payments declared by the insurance company to
policyowners.
McCarran-Ferguson Act - ANSWER-The act that was enacted in 1945.
Reserves - ANSWER-The stated amount or percent of liquid assets that an
insurer must have on hand to satisfy future obligations to its policyholders.
Fraternal benefit society - ANSWER-A nonprofit incorporated society that
does not have capital stock and operates for the sole benefits of its
members.
Risk retention group - ANSWER-A group-owned insurance company
formed to assume and spread the liability risks of its members.
Consumer or credit history investigation - ANSWER-The requirement for
insurers to disclose when an applicant's consumer or credit history is being
investigated under the Fair Credit Reporting Act.
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Participating - ANSWER-When a policy pays dividends to its policyholders.
Fair Credit Reporting Act rights notification - ANSWER-The point at which a
life insurance applicant must be informed of their rights under the Fair
Credit Reporting Act is upon completion of the application.
Investment regarding reputation and character - ANSWER-An insurance
applicant MUST be informed of this according to the Fair Credit Reporting
Act.
Governing body of mutual insurance company - ANSWER-Elected by
policyholders.
Treaty - ANSWER-A type of reinsurance contract that involves two
companies automatically sharing their risk exposure.
Binding contract - ANSWER-An informal agreement becomes a binding
contract when consideration is provided by one of the parties.
Representations - ANSWER-Statements made on an insurance application
that are believed to be true to the best of the applicant's knowledge.
Insurable interest - ANSWER-Required for applicants who are also the
stated primary beneficiary when third-party ownership is involved.
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Unilateral contracts - ANSWER-Life and health insurance policies are
classified as this type of contract.
Aleatory - ANSWER-The feature of insurance contracts that reflects an
exchange of unequal values, such as when a $500,000 life insurance policy
is paid out after $900 in premiums.
Contract of adhesion - ANSWER-A contract where one party either accepts
or rejects the terms written by another party.
Fiduciary responsibility - ANSWER-Taking receipt of premiums and holding
them for the insurance company is an example of this.
Unilateral contract - ANSWER-An insurance contract where the insurer is
the only party who makes a legally enforceable promise.
Warranty - ANSWER-A statement guaranteed to be true.
Agent authority types - ANSWER-Types of agent authority include express,
implied, and apparent, but not principle.
Life insurance policy proceeds - ANSWER-In the case where E dies and F
is the primary beneficiary, the proceeds from E's life insurance policy will be
directed to F, despite the lack of insurable interest.
False representations - ANSWER-Will void a policy if material to the risk.
CA PSI SITE LIFE ACCIDENT AND HEALTH OR SICKNESS
EXAM (LIFE AGENT) 2025 EXAM WITH COMPLETE
QUESTIONS AND VERIFIED ANSWERS ||AWARDED A+||
Whole life - ANSWER-A life insurance policy that either pays the face value
upon the death of the insured or when the insured reaches age 100.
Modified endowment contract (MEC) - ANSWER-The result when a life
insurance policy exceeds certain IRS table values.
Child term rider - ANSWER-An insurance product that can cover the
children of someone covered by a whole life policy.
Key person insurance - ANSWER-A policy that an architecture firm should
purchase on its project manager to protect against financial loss due to
death.
Face amount plus cash value policy - ANSWER-A life insurance policy that
pays the face amount plus the policy's cash value upon the insured's death.
Variable insurance policy - ANSWER-A policy that does not guarantee a
return on its investment accounts.
Decreasing term life policy - ANSWER-A policy normally used when
covering an insured's mortgage balance.
,2|Page
Fair Credit Reporting Act - ANSWER-The law that requires insurers to
disclose information gathering practices and where the information was
obtained.
Participating insurance policy - ANSWER-A policy where policyowners are
entitled to receive dividends.
Dividends - ANSWER-Payments declared by the insurance company to
policyowners.
McCarran-Ferguson Act - ANSWER-The act that was enacted in 1945.
Reserves - ANSWER-The stated amount or percent of liquid assets that an
insurer must have on hand to satisfy future obligations to its policyholders.
Fraternal benefit society - ANSWER-A nonprofit incorporated society that
does not have capital stock and operates for the sole benefits of its
members.
Risk retention group - ANSWER-A group-owned insurance company
formed to assume and spread the liability risks of its members.
Consumer or credit history investigation - ANSWER-The requirement for
insurers to disclose when an applicant's consumer or credit history is being
investigated under the Fair Credit Reporting Act.
,3|Page
Participating - ANSWER-When a policy pays dividends to its policyholders.
Fair Credit Reporting Act rights notification - ANSWER-The point at which a
life insurance applicant must be informed of their rights under the Fair
Credit Reporting Act is upon completion of the application.
Investment regarding reputation and character - ANSWER-An insurance
applicant MUST be informed of this according to the Fair Credit Reporting
Act.
Governing body of mutual insurance company - ANSWER-Elected by
policyholders.
Treaty - ANSWER-A type of reinsurance contract that involves two
companies automatically sharing their risk exposure.
Binding contract - ANSWER-An informal agreement becomes a binding
contract when consideration is provided by one of the parties.
Representations - ANSWER-Statements made on an insurance application
that are believed to be true to the best of the applicant's knowledge.
Insurable interest - ANSWER-Required for applicants who are also the
stated primary beneficiary when third-party ownership is involved.
, 4|Page
Unilateral contracts - ANSWER-Life and health insurance policies are
classified as this type of contract.
Aleatory - ANSWER-The feature of insurance contracts that reflects an
exchange of unequal values, such as when a $500,000 life insurance policy
is paid out after $900 in premiums.
Contract of adhesion - ANSWER-A contract where one party either accepts
or rejects the terms written by another party.
Fiduciary responsibility - ANSWER-Taking receipt of premiums and holding
them for the insurance company is an example of this.
Unilateral contract - ANSWER-An insurance contract where the insurer is
the only party who makes a legally enforceable promise.
Warranty - ANSWER-A statement guaranteed to be true.
Agent authority types - ANSWER-Types of agent authority include express,
implied, and apparent, but not principle.
Life insurance policy proceeds - ANSWER-In the case where E dies and F
is the primary beneficiary, the proceeds from E's life insurance policy will be
directed to F, despite the lack of insurable interest.
False representations - ANSWER-Will void a policy if material to the risk.
