Final answer:
A psychological turning point that leads to new self-insight and adjusts life's direction is termed a midlife crisis, aligning with Erikson's theory on psychosocial development.
Step-by-step explanation:
A psychological turning point that often yields new insight into the self and corrects life's design and trajectory is commonly referred to as a midlife crisis. During a midlife crisis, individuals may evaluate their achievements, goals, and dreams, which can lead to a significant shift in their approach to life. It is at this stage that adults reflect on their accomplishments and either develop a sense of integrity or fall into despair, according to Erik H. Erikson's psychosocial stages of development. Unlike a midlife crisis, a midlife review is a more analytical process where individuals assess and make sense of their life and contributions without necessarily experiencing the emotional turmoil of a crisis.