CA LIFE EXAM – PSI Life Questions and Answers 100% Verified
1. A participating company is also referred to as which type of insurer?: Mutual insurer
a a a a a a a a a a a a a
2. An insurer owned by its policyholders, is called a: Mutual insurer
a a a a a a a a a a
3. What is a participating life insurance policy?: Contract that allows the policy-
a a a a a a a a a a a
owner to receive a share of surplus in the form of policy dividends
a a a a a a a a a a a a a
4. An insurer enter into a contract with a third-
a a a a a a a a
party to ensure itself against losses from insurance policies it issues.What is this agreem
a a a a a a a a a a a a a a
ent called?: Rein- surance
a a a
5. John owns an insurance company that gives him the right to share and then sure surplus.
a a a a a a a a a a a a a a a
What kind of policy is this?: Participating
a a a a a a a
6. Which of the following is not a characteristic of reinsurance?: Increases the unearned pr
a a a a a a a a a a a a a
emium reserved a
7. Which of the following is not a benefit of insurance?: Losses due to fraud are eliminated
a a a a a a a a a a a a a a a
8. When a mutual insurer becomes a stock company, the process is called: -
a a a a a a a a a a a a
Demutualization
9. Which of the following is a contract that involves one party which indemni-
a a a a a a a a a a a a
fies another one a loss arises from an unknown event?: Insurance policy
a a a a a a a a a a a a
10. Which of the following is an insurer established by a parent company's loss expos
a a a a a a a a a a a a a
ure's?: Captive insurers
a a
11. Which of the following is not considered to be a definition for the term "loss"?: Pr
a a a a a a a a a a a a a a a
obability that an event will occur
a a a a a
12. Which of the following is not considered a definition of a risk?: The cause of loss
a a a a a a a a a a a a a a a
13. Which of the following best describes the statement; " the more times, and event is rep
a a a a a a a a a a a a a a a
eated, the more predictable the outcome becomes"?: Law of large numbers
a a a a a a a a a a
14. Which of the following would not be accomplished with the purchase of an insurance p
a a a a a a a a a a a a a a
olicy?: Risk is eliminated
a a a
15. Which of the following is a situation where there is a possibility of either a loss or gain
a a a a a a a a a a a a a a a a a
?: Speculative risk
a a
16. Which of the following is any situation that presents the possibility of a loss?: Loss
a a a a a a a a a a a a a a
1a/a
17
,17. An insurer having a large number of similar exposure units is considered important b
a a a a a a a a a a a a a
ecause:: the greater the number insured, the more accurately that is her can predict losses
a a a a a a a a a a a a a a a
& set appropriate premiums
a a a
18. Which of these statements correctly describes risks?: Pure risk is the only insurable ri
a a a a a a a a a a a a a
sk
19. Which type of risk is gambling?: Speculative risk
a a a a a a a
2a/a
17
, 20. Moral hazard is described as the:: increased chance of a loss because of an insured's d
a a a a a a a a a a a a a a a
ishonest tendencies a
21. All of the following circumstances must be met for los retention to be an effective, ri
a a a a a a a a a a a a a a a
sk management technique, except: Probability of loss is unknown
a a a a a a a a
22. All of the following circumstances must be met for lost attention to be an effective ri
a a a a a a a a a a a a a a a
sk management technique, except: Probability of loss is unknown
a a a a a a a a
23. After a policy has lapsed, which provision allows the insurer to continue coverage: R
a a a a a a a a a a a a a
einstatement provision a
24. In a life insurance policy, the entire contract consists of: policy and attached application
a a a a a a a a a a a a a
25. Which policy provision protects the policy owner from unintentional lapse of the contr
a a a a a a a a a a a a
act?: Grace period a a
26. Which of the following is not a common life insurance policy later?: Ex- tended term
a a a a a a a a a a a a a a
27. What an accidental death benefit is added to a whole life policy, how does this affect t
a a a a a a a a a a a a a a a a
he policies cash value?: Policies, cash value is not affected
a a a a a a a a a
28. A life insurance policy can be surrendered for its cash value under which policy provi
a a a a a a a a a a a a a a
sion?: Nonforfeiture options a a
29. Which of the following does a policy owner not have the right to change?-
a a a a a a a a a a a a a
: Dividend schedule
a a
30. Which statement is true regarding policy dividends?: A dividend option is selected by
a a a a a a a a a a a a
athe insured at the time of the policy purchase
a a a a a a a a
31. What does the grace period allow a life insurance policy to do?: Make a premium pa
a a a a a a a a a a a a a a a
yment after the due date without any loss of coverage
a a a a a a a a a
32. If an insured dies because of an accident, which type of life insurance rider will provide
a a a a a a a a a a a a a a a
aadditional coverage?: Accidental death rider a a a a
33. How is a life insurance policy dividend legally defined?: A return of excess premium an
a a a a a a a a a a a a a a
d non-taxable a
34. An insurer can be protected from adverse selection by which policy provi-
a a a a a a a a a a a
asion?: Suicide clause a a
35. What does the guaranteed insurability option allow and insured to do?: -
a a a a a a a a a a a
Purchase additional coverage with no evidence of insurability required
a a a a a a a a
36. How are the acts of war and aviation treated under a group life insurance policy?: Pol
a a a a a a a a a a a a a a a
3a/a
17
1. A participating company is also referred to as which type of insurer?: Mutual insurer
a a a a a a a a a a a a a
2. An insurer owned by its policyholders, is called a: Mutual insurer
a a a a a a a a a a
3. What is a participating life insurance policy?: Contract that allows the policy-
a a a a a a a a a a a
owner to receive a share of surplus in the form of policy dividends
a a a a a a a a a a a a a
4. An insurer enter into a contract with a third-
a a a a a a a a
party to ensure itself against losses from insurance policies it issues.What is this agreem
a a a a a a a a a a a a a a
ent called?: Rein- surance
a a a
5. John owns an insurance company that gives him the right to share and then sure surplus.
a a a a a a a a a a a a a a a
What kind of policy is this?: Participating
a a a a a a a
6. Which of the following is not a characteristic of reinsurance?: Increases the unearned pr
a a a a a a a a a a a a a
emium reserved a
7. Which of the following is not a benefit of insurance?: Losses due to fraud are eliminated
a a a a a a a a a a a a a a a
8. When a mutual insurer becomes a stock company, the process is called: -
a a a a a a a a a a a a
Demutualization
9. Which of the following is a contract that involves one party which indemni-
a a a a a a a a a a a a
fies another one a loss arises from an unknown event?: Insurance policy
a a a a a a a a a a a a
10. Which of the following is an insurer established by a parent company's loss expos
a a a a a a a a a a a a a
ure's?: Captive insurers
a a
11. Which of the following is not considered to be a definition for the term "loss"?: Pr
a a a a a a a a a a a a a a a
obability that an event will occur
a a a a a
12. Which of the following is not considered a definition of a risk?: The cause of loss
a a a a a a a a a a a a a a a
13. Which of the following best describes the statement; " the more times, and event is rep
a a a a a a a a a a a a a a a
eated, the more predictable the outcome becomes"?: Law of large numbers
a a a a a a a a a a
14. Which of the following would not be accomplished with the purchase of an insurance p
a a a a a a a a a a a a a a
olicy?: Risk is eliminated
a a a
15. Which of the following is a situation where there is a possibility of either a loss or gain
a a a a a a a a a a a a a a a a a
?: Speculative risk
a a
16. Which of the following is any situation that presents the possibility of a loss?: Loss
a a a a a a a a a a a a a a
1a/a
17
,17. An insurer having a large number of similar exposure units is considered important b
a a a a a a a a a a a a a
ecause:: the greater the number insured, the more accurately that is her can predict losses
a a a a a a a a a a a a a a a
& set appropriate premiums
a a a
18. Which of these statements correctly describes risks?: Pure risk is the only insurable ri
a a a a a a a a a a a a a
sk
19. Which type of risk is gambling?: Speculative risk
a a a a a a a
2a/a
17
, 20. Moral hazard is described as the:: increased chance of a loss because of an insured's d
a a a a a a a a a a a a a a a
ishonest tendencies a
21. All of the following circumstances must be met for los retention to be an effective, ri
a a a a a a a a a a a a a a a
sk management technique, except: Probability of loss is unknown
a a a a a a a a
22. All of the following circumstances must be met for lost attention to be an effective ri
a a a a a a a a a a a a a a a
sk management technique, except: Probability of loss is unknown
a a a a a a a a
23. After a policy has lapsed, which provision allows the insurer to continue coverage: R
a a a a a a a a a a a a a
einstatement provision a
24. In a life insurance policy, the entire contract consists of: policy and attached application
a a a a a a a a a a a a a
25. Which policy provision protects the policy owner from unintentional lapse of the contr
a a a a a a a a a a a a
act?: Grace period a a
26. Which of the following is not a common life insurance policy later?: Ex- tended term
a a a a a a a a a a a a a a
27. What an accidental death benefit is added to a whole life policy, how does this affect t
a a a a a a a a a a a a a a a a
he policies cash value?: Policies, cash value is not affected
a a a a a a a a a
28. A life insurance policy can be surrendered for its cash value under which policy provi
a a a a a a a a a a a a a a
sion?: Nonforfeiture options a a
29. Which of the following does a policy owner not have the right to change?-
a a a a a a a a a a a a a
: Dividend schedule
a a
30. Which statement is true regarding policy dividends?: A dividend option is selected by
a a a a a a a a a a a a
athe insured at the time of the policy purchase
a a a a a a a a
31. What does the grace period allow a life insurance policy to do?: Make a premium pa
a a a a a a a a a a a a a a a
yment after the due date without any loss of coverage
a a a a a a a a a
32. If an insured dies because of an accident, which type of life insurance rider will provide
a a a a a a a a a a a a a a a
aadditional coverage?: Accidental death rider a a a a
33. How is a life insurance policy dividend legally defined?: A return of excess premium an
a a a a a a a a a a a a a a
d non-taxable a
34. An insurer can be protected from adverse selection by which policy provi-
a a a a a a a a a a a
asion?: Suicide clause a a
35. What does the guaranteed insurability option allow and insured to do?: -
a a a a a a a a a a a
Purchase additional coverage with no evidence of insurability required
a a a a a a a a
36. How are the acts of war and aviation treated under a group life insurance policy?: Pol
a a a a a a a a a a a a a a a
3a/a
17
