California PSI Life Insurance Practice Test 2025 with 250
Most Recent Exam Questions and Correct Answers/ PSI Life
Insurance Exam (California) Latest 2025-2026
Individual life insurance policies sold to seniors in the State of California must
include a prominently placed statement that divulges all of the following
information EXCEPT - ANSWER-Proof of surrender must be notarized at the
agent's principal office.
What is one difference between group life an individual life individual life
underwriting? - ANSWER-Individual life insurance requires the applicant to
answer medical questions
A $50,000 whole life policy with a cask value of $10,000 has ben in force for
eleven years. The policy owner is unable to continue the premium payment. Which
of the following describes the reduced paid-up nonforfeiture option - ANSWER-
The cash value is used to select a $20,000 paid-up policy
If an life agent sells a whole life policy to an prospect on behalf of an insurer
without an appointment, the - ANSWER-Insurer must submit a notice of
appointment to the Commissioner
Which component of a life insurance premium is based on the insured's age and
gender? - ANSWER-Mortality
If you have been convicted of a misdemeanor and that misdemeanor conviction is
later expunged pursuant to California Penal Code Section 1203.4, which of the
following is true? - ANSWER-Even though your misdemeanor conviction was
expunged, you must still disclose your misdemeanor conviction on your individual
application for an insurance license
pg. 1
,Which is the following wound an agent be guilty of for misrepresenting the amount
of dividends a policy will pay? - ANSWER-A misdemeanor
Which benefits are provided by key employee insurance? - ANSWER-Payment to
a business when an important employee dies
How can partners guarantee a market for their share of the business in the event of
death? - ANSWER-Buy-sell agreements
Which policy covering two or more individuals pays the face amount only when
the first person dies? - ANSWER-Joint life policy
Which two insurance products are commonly used to fund buy-sell agreements? -
ANSWER-Life insurance and disability insurance
Which policy provision prote4cts the insurer against possible adverse selection? -
ANSWER-Suicide clause
Which type of insurance coverage has both a savings element and flexible
premium option? - ANSWER-Universal life
A life insurance policy written after 1988 that fails to meet the seven pay test is
known as - ANSWER-A modified endowment contract
What type of insurance policy provides a death benefit that matches the projected
outstanding debt on an individual's home? - ANSWER-Mortgage redemption
pg. 2
, An agent who violates the laws governing life insurance policy illustration sis
subject to all of the following EXCEPT - ANSWER-Mandatory termination of all
insurer appointments
what is meant by referring to an insurance policy as a unilateral contract? -
ANSWER-Only one party makes a legally enforceable promise
when must insurance records of insurance agents and brokers be made available to
the insurance Commissioner - ANSWER-At all times
Any situation that presents the possibility of a loss is known as - ANSWER-A loss
exposure
Which of the following information is not required to be communicated in a Life
Insurance contract? - ANSWER-Personal judgment
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - ANSWER-Telephone call from an agent
A contract in which one party promises to indemnify another against loss that
arises from an unknown even is - ANSWER-An insurance policy
All of the occurrences listed below area examples of an insurable event as defined
by the California insurance Code EXCEPT - ANSWER-An insured suffers a
financial loss in the stat lottery
All of the following statements about aleatory contracts are true EXCEPT -
ANSWER-The insured and insurer contribute equally to the contract
pg. 3
Most Recent Exam Questions and Correct Answers/ PSI Life
Insurance Exam (California) Latest 2025-2026
Individual life insurance policies sold to seniors in the State of California must
include a prominently placed statement that divulges all of the following
information EXCEPT - ANSWER-Proof of surrender must be notarized at the
agent's principal office.
What is one difference between group life an individual life individual life
underwriting? - ANSWER-Individual life insurance requires the applicant to
answer medical questions
A $50,000 whole life policy with a cask value of $10,000 has ben in force for
eleven years. The policy owner is unable to continue the premium payment. Which
of the following describes the reduced paid-up nonforfeiture option - ANSWER-
The cash value is used to select a $20,000 paid-up policy
If an life agent sells a whole life policy to an prospect on behalf of an insurer
without an appointment, the - ANSWER-Insurer must submit a notice of
appointment to the Commissioner
Which component of a life insurance premium is based on the insured's age and
gender? - ANSWER-Mortality
If you have been convicted of a misdemeanor and that misdemeanor conviction is
later expunged pursuant to California Penal Code Section 1203.4, which of the
following is true? - ANSWER-Even though your misdemeanor conviction was
expunged, you must still disclose your misdemeanor conviction on your individual
application for an insurance license
pg. 1
,Which is the following wound an agent be guilty of for misrepresenting the amount
of dividends a policy will pay? - ANSWER-A misdemeanor
Which benefits are provided by key employee insurance? - ANSWER-Payment to
a business when an important employee dies
How can partners guarantee a market for their share of the business in the event of
death? - ANSWER-Buy-sell agreements
Which policy covering two or more individuals pays the face amount only when
the first person dies? - ANSWER-Joint life policy
Which two insurance products are commonly used to fund buy-sell agreements? -
ANSWER-Life insurance and disability insurance
Which policy provision prote4cts the insurer against possible adverse selection? -
ANSWER-Suicide clause
Which type of insurance coverage has both a savings element and flexible
premium option? - ANSWER-Universal life
A life insurance policy written after 1988 that fails to meet the seven pay test is
known as - ANSWER-A modified endowment contract
What type of insurance policy provides a death benefit that matches the projected
outstanding debt on an individual's home? - ANSWER-Mortgage redemption
pg. 2
, An agent who violates the laws governing life insurance policy illustration sis
subject to all of the following EXCEPT - ANSWER-Mandatory termination of all
insurer appointments
what is meant by referring to an insurance policy as a unilateral contract? -
ANSWER-Only one party makes a legally enforceable promise
when must insurance records of insurance agents and brokers be made available to
the insurance Commissioner - ANSWER-At all times
Any situation that presents the possibility of a loss is known as - ANSWER-A loss
exposure
Which of the following information is not required to be communicated in a Life
Insurance contract? - ANSWER-Personal judgment
The direct distribution of insurance utilizes all of the following to promote the sale
of insurance EXCEPT - ANSWER-Telephone call from an agent
A contract in which one party promises to indemnify another against loss that
arises from an unknown even is - ANSWER-An insurance policy
All of the occurrences listed below area examples of an insurable event as defined
by the California insurance Code EXCEPT - ANSWER-An insured suffers a
financial loss in the stat lottery
All of the following statements about aleatory contracts are true EXCEPT -
ANSWER-The insured and insurer contribute equally to the contract
pg. 3
