CA PSI Site - Life, Accident and Health Agent Examination Questions and Answers Verified

CA PSI Site - Life, Accident and Health Agent Examination Questions and Answers Verified Admitted Insurance Company vs. Non-Admitted Insurance Company - CORRECT ANSWER-An admitted insurance company is authorized to transact insurance in California because it has a Certificate of Authority granted by the California Department of Insurance (CDI) A non-admitted insurance company is not authorized to transact insurance in California because of failing to comply with California requirements or did not seek admission Pure Risk vs. Speculative Risk - CORRECT ANSWER-Pure risks are insurable but Speculative risks are not Pure Risks - A possibility of loss, no loss, or gain Pure Risk - A possibility of loss or no loss; there is no possibility for gain Contract of Adhesion - CORRECT ANSWER-One party writes the contract without inout from the other party on a "take-it-or-leave-it" basis Aleatory Contract - CORRECT ANSWER-The exchange of value is unequal. Insured's premium payment is less than the potential benefit to be received in the event of a loss. Indemnity Contract - CORRECT ANSWER-An agreement to pay on behalf of another party under specified circumstances Unilateral Contract - CORRECT ANSWER-Only one party is legally bound to the contractual obligations after the premium is paid to the insurer Only the insurer makes a promise of future performance, and only the insurer can be charged with breach of contract 4 elements of a valid contract - CORRECT ANSWER-1) Competent Parties 2) Legal Purpose 3) Agreement (offer and acceptance) 4) Consideration Preferred Risks vs Standard Risks - CORRECT ANSWER-Standard Risks are individuals who have the same health, habits, sex/gender, and occupational characteristics as those reflected in the mortality table Preferred Risks are individuals who meet certain requirements and qualify for lower premiums because of ideal health, height and weight. Individuals in this category have a longer than average life expectanc