CA PSI SITE - LIFE, ACCIDENT AND HEALTH AGENT
EXAM latest update 2025-2026 COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
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 |expectancy
Human |Life |Value |Approach |vs. |Needs |Analysis |Approach |-CORRECT |ANSWER
Human |Life |Value |approach |is |a |measure |of |the |projected |future |earnings |and |services
of |a |person |at |risk |in |the |event |of |a |premature |death.
The |objective |is |to |provide |the |proper |amount |of |coverage |as |determined |by |the |value |of
the |individual |to |his/her |dependents |using |the |following |factors:
- The |individual's |age |and |gender
- The |individual's |occupation, |annual |wage, |and |planned |retirement |age
- Inflation
Needs |Analysis |Approach |determines |a |need |for |coverage |upon |the |premature |death |of
an |individual.
It |always |assumes |the |death |of |the |individual |to |be |immediate |and |factors |the |following
steps |into |arriving |at |the |proper |amount |of |coverage |needed:
- Calculate |all |financial |needs |caused |by |immediate |death, |including |debts, |medical
bills, |and |final |expenses
- Provide |lifetime |income |to |the |spouse
, - Pay |off |mortgage |or |other |debts
- Provide |funds |for |children's |education
- Subtracts |any |assets |available |to |fund |financial |needs |after |death |(such |as |retirement
plan, |other |insurance, |liquid |investments, |separate |savings)
Waiver |of |Premium |-CORRECT |ANSWER |Life |Insurance |Disability |Rider
If |the |insured |becomes |totally |disabled, |the |insurer |will |waive |premiums |for |the |duration
of |the |disability |or |the |end |of |the |policy, |whichever |occurs |first.
To |qualify |for |the |waiver, |the |insured |must |be |disabled |for |a |waiting |period |of |3-6
months.
The |policyowner |must |continue |to |pay |premiums |during |the |waiting |period, |but |once
eligible, |the |waiver |is |retroactive |to |the |start |of |the |disability |and |the |premiums |will |be
refunded.
During |the |disability, |the |insured |will |credit |the |premiums |to |the |policy |and |all |benefits,
such |as |cash |value |accumulation |and |dividend |payments, |will |continue.
Disability |Income |Rider |-CORRECT |ANSWER |Life |Insurance |Disability |Rider
In |the |event |of |total |disability |and |after |the |initial |waiting |period |(such |as |6 |months),
premiums |are |waived |and |the |insured |is |paid |a |monthly |income.
EXAM latest update 2025-2026 COMPREHENSIVE
QUESTIONS AND VERIFIED ANSWERS
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 |expectancy
Human |Life |Value |Approach |vs. |Needs |Analysis |Approach |-CORRECT |ANSWER
Human |Life |Value |approach |is |a |measure |of |the |projected |future |earnings |and |services
of |a |person |at |risk |in |the |event |of |a |premature |death.
The |objective |is |to |provide |the |proper |amount |of |coverage |as |determined |by |the |value |of
the |individual |to |his/her |dependents |using |the |following |factors:
- The |individual's |age |and |gender
- The |individual's |occupation, |annual |wage, |and |planned |retirement |age
- Inflation
Needs |Analysis |Approach |determines |a |need |for |coverage |upon |the |premature |death |of
an |individual.
It |always |assumes |the |death |of |the |individual |to |be |immediate |and |factors |the |following
steps |into |arriving |at |the |proper |amount |of |coverage |needed:
- Calculate |all |financial |needs |caused |by |immediate |death, |including |debts, |medical
bills, |and |final |expenses
- Provide |lifetime |income |to |the |spouse
, - Pay |off |mortgage |or |other |debts
- Provide |funds |for |children's |education
- Subtracts |any |assets |available |to |fund |financial |needs |after |death |(such |as |retirement
plan, |other |insurance, |liquid |investments, |separate |savings)
Waiver |of |Premium |-CORRECT |ANSWER |Life |Insurance |Disability |Rider
If |the |insured |becomes |totally |disabled, |the |insurer |will |waive |premiums |for |the |duration
of |the |disability |or |the |end |of |the |policy, |whichever |occurs |first.
To |qualify |for |the |waiver, |the |insured |must |be |disabled |for |a |waiting |period |of |3-6
months.
The |policyowner |must |continue |to |pay |premiums |during |the |waiting |period, |but |once
eligible, |the |waiver |is |retroactive |to |the |start |of |the |disability |and |the |premiums |will |be
refunded.
During |the |disability, |the |insured |will |credit |the |premiums |to |the |policy |and |all |benefits,
such |as |cash |value |accumulation |and |dividend |payments, |will |continue.
Disability |Income |Rider |-CORRECT |ANSWER |Life |Insurance |Disability |Rider
In |the |event |of |total |disability |and |after |the |initial |waiting |period |(such |as |6 |months),
premiums |are |waived |and |the |insured |is |paid |a |monthly |income.
