California Adjuster PSI Exam Questions
and Answers 100% Correct And verified
the best Approach 2026 Preparing you To
PASS!!!
A participating company is also referred to as which type of insurer? - CORRECT
ANSWERS-Mutual insurer
An insurer owned by its policyholders, is called a - CORRECT ANSWERS-Mutual
insurer
What is a participating life insurance policy? - CORRECT ANSWERS-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 ANSWERS-
Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - CORRECT ANSWERS-Participating
Which of the following is not a characteristic of reinsurance? - CORRECT ANSWERS-
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - CORRECT ANSWERS-Losses
due to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - CORRECT
ANSWERS-Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? - CORRECT ANSWERS-Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
- CORRECT ANSWERS-Captive insurers
Which of the following is not considered to be a definition for the term "loss"? -
CORRECT ANSWERS-Probability that an event will occur
,Which of the following is not considered a definition of a risk? - CORRECT ANSWERS-
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 ANSWERS-Law
of large numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? - CORRECT ANSWERS-Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
CORRECT ANSWERS-Speculative risk
Which of the following is any situation that presents the possibility of a loss? -
CORRECT ANSWERS-Loss
An insurer having a large number of similar exposure units is considered important
because: - CORRECT ANSWERS-the greater the number insured, the more accurately
that is her can predict losses & set appropriate premiums
Which of these statements correctly describes risks? - CORRECT ANSWERS-Pure risk
is the only insurable risk
Which type of risk is gambling? - CORRECT ANSWERS-Speculative risk
Moral hazard is described as the: - CORRECT ANSWERS-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 ANSWERS-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 ANSWERS-Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage -
CORRECT ANSWERS-Reinstatement provision
In a life insurance policy, the entire contract consists of - CORRECT ANSWERS-policy
and attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? - CORRECT ANSWERS-Grace period
Which of the following is not a common life insurance policy later? - CORRECT
ANSWERS-Extended term
,What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? - CORRECT ANSWERS-Policies, cash value is not affected
A life insurance policy can be surrendered for its cash value under which policy
provision? - CORRECT ANSWERS-Nonforfeiture options
Which of the following does a policy owner not have the right to change? - CORRECT
ANSWERS-Dividend schedule
Which statement is true regarding policy dividends? - CORRECT ANSWERS-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
ANSWERS-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 ANSWERS-Accidental death rider
How is a life insurance policy dividend legally defined? - CORRECT ANSWERS-A
return of excess premium and non-taxable
An insurer can be protected from adverse selection by which policy provision? -
CORRECT ANSWERS-Suicide clause
What does the guaranteed insurability option allow and insured to do? - CORRECT
ANSWERS-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 ANSWERS-Policy exclusion
Which of these is not a valid policy dividend option? - CORRECT ANSWERS-Monthly
income payments
True statement of policy dividends? - CORRECT ANSWERS-A dividend option is
selected by the insured at the time of the policy purchase
The probability of death, listed by year, is demonstrated in - CORRECT ANSWERS-
Mortality tables
Which of the following describes the number of deaths in a year compared to the
number of people in a select group? - CORRECT ANSWERS-Mortality rate
Which of the following is not a life insurance settlement option? - CORRECT
ANSWERS-Extended term option
, An annuity which is backed by a life insurer's separate account is called a(n) -
CORRECT ANSWERS-Variable annuity
What is a common reason people purchase an annuity? - CORRECT ANSWERS-To
protect against the risk of outliving their financial resources
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - CORRECT ANSWERS-Deferred annuity
Victoria owns a life annuity & elects to receive and with your payments monthly for the
remainder of her life, with "10 years certain" her annuity will make payments -
CORRECT ANSWERS-For a minimum of 120 months & a maximum of the remainder of
her life
The systematic liquidation of a sum of money is provided by - CORRECT ANSWERS-
annuity
What distinguishes a deferred annuity from an immediate annuity? - CORRECT
ANSWERS-The time at which benefit payments start
How long no is a person expected to be disabled in order to receive social security
disability benefits? - CORRECT ANSWERS-12 months
Which type of worker has Social Security benefits available to them? - CORRECT
ANSWERS-fully insured
The reason for social insurance is to - CORRECT ANSWERS-protect certain vulnerable
segments of the population
According to Social Security, an individual with six credits of coverage during the
previous 13-quarter period is considered to be - CORRECT ANSWERS-Currently
insured
The "blackout period" affects whose benefits? - CORRECT ANSWERS-Surviving
spouse
What is considered to be the definition of disability, according to social security? -
CORRECT ANSWERS-Unable to engage in any substantial gainful activity
What determines the Social Security normal retirement age? - CORRECT ANSWERS-
Year in which worker was born
Which statement is not true regarding Social Security benefits? - CORRECT
ANSWERS-Benefits are designed to replace the entire amount of the workers earnings
and Answers 100% Correct And verified
the best Approach 2026 Preparing you To
PASS!!!
A participating company is also referred to as which type of insurer? - CORRECT
ANSWERS-Mutual insurer
An insurer owned by its policyholders, is called a - CORRECT ANSWERS-Mutual
insurer
What is a participating life insurance policy? - CORRECT ANSWERS-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 ANSWERS-
Reinsurance
John owns an insurance company that gives him the right to share and then sure
surplus. What kind of policy is this? - CORRECT ANSWERS-Participating
Which of the following is not a characteristic of reinsurance? - CORRECT ANSWERS-
Increases the unearned premium reserved
Which of the following is not a benefit of insurance? - CORRECT ANSWERS-Losses
due to fraud are eliminated
When a mutual insurer becomes a stock company, the process is called - CORRECT
ANSWERS-Demutualization
Which of the following is a contract that involves one party which indemnifies another
one a loss arises from an unknown event? - CORRECT ANSWERS-Insurance policy
Which of the following is an insurer established by a parent company's loss exposure's?
- CORRECT ANSWERS-Captive insurers
Which of the following is not considered to be a definition for the term "loss"? -
CORRECT ANSWERS-Probability that an event will occur
,Which of the following is not considered a definition of a risk? - CORRECT ANSWERS-
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 ANSWERS-Law
of large numbers
Which of the following would not be accomplished with the purchase of an insurance
policy? - CORRECT ANSWERS-Risk is eliminated
Which of the following is a situation where there is a possibility of either a loss or gain? -
CORRECT ANSWERS-Speculative risk
Which of the following is any situation that presents the possibility of a loss? -
CORRECT ANSWERS-Loss
An insurer having a large number of similar exposure units is considered important
because: - CORRECT ANSWERS-the greater the number insured, the more accurately
that is her can predict losses & set appropriate premiums
Which of these statements correctly describes risks? - CORRECT ANSWERS-Pure risk
is the only insurable risk
Which type of risk is gambling? - CORRECT ANSWERS-Speculative risk
Moral hazard is described as the: - CORRECT ANSWERS-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 ANSWERS-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 ANSWERS-Probability of loss is unknown
After a policy has lapsed, which provision allows the insurer to continue coverage -
CORRECT ANSWERS-Reinstatement provision
In a life insurance policy, the entire contract consists of - CORRECT ANSWERS-policy
and attached application
Which policy provision protects the policy owner from unintentional lapse of the
contract? - CORRECT ANSWERS-Grace period
Which of the following is not a common life insurance policy later? - CORRECT
ANSWERS-Extended term
,What an accidental death benefit is added to a whole life policy, how does this affect the
policies cash value? - CORRECT ANSWERS-Policies, cash value is not affected
A life insurance policy can be surrendered for its cash value under which policy
provision? - CORRECT ANSWERS-Nonforfeiture options
Which of the following does a policy owner not have the right to change? - CORRECT
ANSWERS-Dividend schedule
Which statement is true regarding policy dividends? - CORRECT ANSWERS-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
ANSWERS-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 ANSWERS-Accidental death rider
How is a life insurance policy dividend legally defined? - CORRECT ANSWERS-A
return of excess premium and non-taxable
An insurer can be protected from adverse selection by which policy provision? -
CORRECT ANSWERS-Suicide clause
What does the guaranteed insurability option allow and insured to do? - CORRECT
ANSWERS-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 ANSWERS-Policy exclusion
Which of these is not a valid policy dividend option? - CORRECT ANSWERS-Monthly
income payments
True statement of policy dividends? - CORRECT ANSWERS-A dividend option is
selected by the insured at the time of the policy purchase
The probability of death, listed by year, is demonstrated in - CORRECT ANSWERS-
Mortality tables
Which of the following describes the number of deaths in a year compared to the
number of people in a select group? - CORRECT ANSWERS-Mortality rate
Which of the following is not a life insurance settlement option? - CORRECT
ANSWERS-Extended term option
, An annuity which is backed by a life insurer's separate account is called a(n) -
CORRECT ANSWERS-Variable annuity
What is a common reason people purchase an annuity? - CORRECT ANSWERS-To
protect against the risk of outliving their financial resources
A savings vehicle designed to first accumulate funds and then systematically liquidates
the funds is called a(n) - CORRECT ANSWERS-Deferred annuity
Victoria owns a life annuity & elects to receive and with your payments monthly for the
remainder of her life, with "10 years certain" her annuity will make payments -
CORRECT ANSWERS-For a minimum of 120 months & a maximum of the remainder of
her life
The systematic liquidation of a sum of money is provided by - CORRECT ANSWERS-
annuity
What distinguishes a deferred annuity from an immediate annuity? - CORRECT
ANSWERS-The time at which benefit payments start
How long no is a person expected to be disabled in order to receive social security
disability benefits? - CORRECT ANSWERS-12 months
Which type of worker has Social Security benefits available to them? - CORRECT
ANSWERS-fully insured
The reason for social insurance is to - CORRECT ANSWERS-protect certain vulnerable
segments of the population
According to Social Security, an individual with six credits of coverage during the
previous 13-quarter period is considered to be - CORRECT ANSWERS-Currently
insured
The "blackout period" affects whose benefits? - CORRECT ANSWERS-Surviving
spouse
What is considered to be the definition of disability, according to social security? -
CORRECT ANSWERS-Unable to engage in any substantial gainful activity
What determines the Social Security normal retirement age? - CORRECT ANSWERS-
Year in which worker was born
Which statement is not true regarding Social Security benefits? - CORRECT
ANSWERS-Benefits are designed to replace the entire amount of the workers earnings
