CA LIFE PSI FINAL PAPER 2026 FULL
QUESTIONS AND CORRECT ANSWERS
ALREADY PASSED
◍ 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
QUESTIONS AND CORRECT ANSWERS
ALREADY PASSED
◍ 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
