CA PSI-LIFE, ACCIDENT, AND HEALTH

CA PSI-LIFE, ACCIDENT, AND HEALTH

OR SICKNESS EXAM QUESTIONS

AND CORRECT DETAILED ANSWERS

(VERIFIED ANSWERS ) || 300 ACTUAL

EXAM QUESTIONS A+ GRADE

A participating company is also referred to as which type of insurer? Correct Answer Mutual insurer

An insurer owned by its policyholders, is called a Correct Answer Mutual insurer

What is a participating life insurance policy? Correct 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? Correct Answer Reinsurance

John owns an insurance company that gives him the right to share and then sure surplus. What kind of policy is this? Correct Answer Participating

Which of the following is not a characteristic of reinsurance?Correct Answer Increases the unearned premium reserved

Which of the following is not a benefit of insurance? Correct Answer Losses due to fraud are eliminated

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When a mutual insurer becomes a stock company, the process is called Correct Answer Demutualization

Which of the following is a contract that involves one party which indemnifies another one a loss arises from an unknown event?Correct Answer Insurance policy

Which of the following is an insurer established by a parent company's loss exposure's? Correct Answer Captive insurers

Which of the following is not considered to be a definition for the term "loss"? Correct Answer Probability that an event will occur

Which of the following is not considered a definition of a risk?Correct 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"? Correct Answer Law of large numbers

Which of the following would not be accomplished with the purchase of an insurance policy? Correct Answer Risk is eliminated

Which of the following is a situation where there is a possibility of either a loss or gain? Correct Answer Speculative risk

Which of the following is any situation that presents the possibility of a loss? Correct Answer Loss

An insurer having a large number of similar exposure units is

considered important because: Correct Answer the greater the

number insured, the more accurately that is her can predict losses & set appropriate premiums

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Which of these statements correctly describes risks? Correct Answer Pure risk is the only insurable risk

Which type of risk is gambling? Correct Answer Speculative risk

Moral hazard is described as the: Correct 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 Correct 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 Correct Answer Probability of loss is unknown

After a policy has lapsed, which provision allows the insurer to continue coverage Correct Answer Reinstatement provision

In a life insurance policy, the entire contract consists of Correct Answer policy and attached application

Which policy provision protects the policy owner from unintentional lapse of the contract? Correct Answer Grace period

Which of the following is not a common life insurance policy later?Correct Answer Extended term

What an accidental death benefit is added to a whole life policy, how does this affect the policies cash value? Correct Answer Policies, cash value is not affected

A life insurance policy can be surrendered for its cash value under which policy provision? Correct Answer Nonforfeiture options

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Which of the following does a policy owner not have the right to change? Correct Answer Dividend schedule

Which statement is true regarding policy dividends? Correct Answer A dividend option is selected by the insured at the time of the policy purchase

What does the grace period allow a life insurance policy to do?Correct Answer Make a premium payment after the due date without any loss of coverage

If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? Correct Answer Accidental death rider

How is a life insurance policy dividend legally defined? Correct Answer A return of excess premium and non-taxable

An insurer can be protected from adverse selection by which policy provision? Correct Answer Suicide clause

What does the guaranteed insurability option allow and insured to do? Correct Answer Purchase additional coverage with no evidence of insurability required

How are the acts of war and aviation treated under a group life insurance policy? Correct Answer Policy exclusion

Which of these is not a valid policy dividend option? Correct Answer Monthly income payments

True statement of policy dividends? Correct Answer A dividend option is selected by the insured at the time of the policy purchase

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