PA LIFE, ACCIDENT, & HEALTH
INSURANCE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Insurance - ANS defined as the transfer of PURE risk to the insurance company in
consideration for a premium.
The chance of loss without any chance of gain is called - ANS pure risk
Speculative risk - ANS has the possibility for gain or loss and is not insurable.
Risk is defined as the - ANS chance of loss.
A condition that could result in a loss is known as an - ANS exposure
A hazard is something that increases - ANS the chance of loss.
The presence of a physical hazard - ANS increases the chance of a loss occurring.
A peril is - ANS defined as a cause of loss, such as fire.
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@2026 EDITION ALLRIGHTS RESERVED
,To be insurable, - ANS losses must be calculable.
The law of large numbers - ANS allows insurers to predict claims more accurately.
The law of large numbers applies to - ANS groups of people, not to individuals.
The more people in the group, - ANS the more accurate the predictions are.
Most insurers buy reinsurance - ANS to protect themselves in the event of a catastrophic loss.
Insurance laws are not required - ANS to be uniform from one state to another.
A stock insurer - ANS may pay dividends to its shareholders (stockholders), but they may not
be guaranteed.
A reciprocal insurance company is managed by an - ANS attorney-in-fact.
An unincorporated association of individuals who insure each other is known as - ANS a
reciprocal insurer.
The government offers insurance primarily based upon - ANS social needs, such as flood
insurance and workers compensation, but does not offer insurance for the purpose of
preventing fraud.
A foreign company - ANS has their home office in another state.
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@2026 EDITION ALLRIGHTS RESERVED
, An insurer incorporated outside of the U.S. who sells in the U.S. is - ANS an alien company.
A producer may be personally liable when - ANS violating the producer's contract.
Producers represent - ANS the insurance company, not the insured.
Independent producers - ANS own their own accounts and are not insurance company
employees.
Producers have - ANS express, implied and apparent authority.
The authority a producer - ANS has that is written in his or her contract is known as express
authority.
A producer's binding authority (if any) - ANS is expressed (written down) in the producer's
contract with the insurer the producer represents.
The authority not expressly (written) granted, - ANS but is actual authority the producer has
to transact normal business activities, is known as implied authority.
The elements of a legal contract may be remembered - ANS by the acronym C-O-A-L
(consideration, offer, acceptance, legal purpose and legal capacity).
A requirement for a valid contract - ANS is offer and acceptance, or mutual agreement.
Advertising the availability of insurance is not - ANS considered to be an offer.
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@2026 EDITION ALLRIGHTS RESERVED
INSURANCE EXAM QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Insurance - ANS defined as the transfer of PURE risk to the insurance company in
consideration for a premium.
The chance of loss without any chance of gain is called - ANS pure risk
Speculative risk - ANS has the possibility for gain or loss and is not insurable.
Risk is defined as the - ANS chance of loss.
A condition that could result in a loss is known as an - ANS exposure
A hazard is something that increases - ANS the chance of loss.
The presence of a physical hazard - ANS increases the chance of a loss occurring.
A peril is - ANS defined as a cause of loss, such as fire.
1
@2026 EDITION ALLRIGHTS RESERVED
,To be insurable, - ANS losses must be calculable.
The law of large numbers - ANS allows insurers to predict claims more accurately.
The law of large numbers applies to - ANS groups of people, not to individuals.
The more people in the group, - ANS the more accurate the predictions are.
Most insurers buy reinsurance - ANS to protect themselves in the event of a catastrophic loss.
Insurance laws are not required - ANS to be uniform from one state to another.
A stock insurer - ANS may pay dividends to its shareholders (stockholders), but they may not
be guaranteed.
A reciprocal insurance company is managed by an - ANS attorney-in-fact.
An unincorporated association of individuals who insure each other is known as - ANS a
reciprocal insurer.
The government offers insurance primarily based upon - ANS social needs, such as flood
insurance and workers compensation, but does not offer insurance for the purpose of
preventing fraud.
A foreign company - ANS has their home office in another state.
2
@2026 EDITION ALLRIGHTS RESERVED
, An insurer incorporated outside of the U.S. who sells in the U.S. is - ANS an alien company.
A producer may be personally liable when - ANS violating the producer's contract.
Producers represent - ANS the insurance company, not the insured.
Independent producers - ANS own their own accounts and are not insurance company
employees.
Producers have - ANS express, implied and apparent authority.
The authority a producer - ANS has that is written in his or her contract is known as express
authority.
A producer's binding authority (if any) - ANS is expressed (written down) in the producer's
contract with the insurer the producer represents.
The authority not expressly (written) granted, - ANS but is actual authority the producer has
to transact normal business activities, is known as implied authority.
The elements of a legal contract may be remembered - ANS by the acronym C-O-A-L
(consideration, offer, acceptance, legal purpose and legal capacity).
A requirement for a valid contract - ANS is offer and acceptance, or mutual agreement.
Advertising the availability of insurance is not - ANS considered to be an offer.
3
@2026 EDITION ALLRIGHTS RESERVED
