CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent) Final.
1. Admitted Insurance Company vs. Non-
An admitted insurance company
Admit- ted Insurance Company
is au- thorized to transact
insurance in Cal- ifornia because
it has a Certificate of Authority
granted by the California De-
partment 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
2. Pure Risk vs. Speculative Risk Pure risks are insurable but
Specula- tive 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
3. Contract of Adhesion One party writes the contract
with- out inout from the other
party on a "take-it-or-leave-it"
basis
4. Aleatory Contract The exchange of value is unequal.
Insured's premium payment
is less than the potential
1/
38
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent) Final.
benefit to be re- ceived in the
event of a loss.
5. Indemnity Contract
1/
38
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent)
An agreement to pay on behalf
of an- other party under
specified circum- stances
6. Unilateral Contract Only one party is legally bound
to the contractual obligations
after the pre- mium is paid to
the insurer
Only the insurer makes a
promise of future performance,
and only the in- surer can be
charged with breach of
contract
7. 4 elements of a valid contract 1) Competent Parties
2) Legal Purpose
3) Agreement (otter and
acceptance)
4) Consideration
8. Preferred Risks vs Standard Risks Standard Risks are individuals who
have the same health, habits,
sex/gen- der, 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 av-
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent)
erage life expectancy
9. Human Life Value Approach vs. Needs Human Life Value approach is a
Analy- sis Approach mea- sure of the projected future
earnings
Agent) Final.
1. Admitted Insurance Company vs. Non-
An admitted insurance company
Admit- ted Insurance Company
is au- thorized to transact
insurance in Cal- ifornia because
it has a Certificate of Authority
granted by the California De-
partment 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
2. Pure Risk vs. Speculative Risk Pure risks are insurable but
Specula- tive 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
3. Contract of Adhesion One party writes the contract
with- out inout from the other
party on a "take-it-or-leave-it"
basis
4. Aleatory Contract The exchange of value is unequal.
Insured's premium payment
is less than the potential
1/
38
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent) Final.
benefit to be re- ceived in the
event of a loss.
5. Indemnity Contract
1/
38
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent)
An agreement to pay on behalf
of an- other party under
specified circum- stances
6. Unilateral Contract Only one party is legally bound
to the contractual obligations
after the pre- mium is paid to
the insurer
Only the insurer makes a
promise of future performance,
and only the in- surer can be
charged with breach of
contract
7. 4 elements of a valid contract 1) Competent Parties
2) Legal Purpose
3) Agreement (otter and
acceptance)
4) Consideration
8. Preferred Risks vs Standard Risks Standard Risks are individuals who
have the same health, habits,
sex/gen- der, 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 av-
, CA PSI Site - Life, Accident and Health Agent Examination (Life
Agent)
erage life expectancy
9. Human Life Value Approach vs. Needs Human Life Value approach is a
Analy- sis Approach mea- sure of the projected future
earnings
