ALBERTA INSURANCE BROKER EXAM QUESTIONS AND
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALE 2026 Q&A|INSTANT DOWNLOAD PDF
1–10: Insurance Fundamentals
1. Insurance is primarily used to:
A. Increase profit
B. Transfer risk
C. Avoid savings
D. Eliminate taxes
Answer: B
Rationale: Insurance shifts financial risk from individual to insurer.
2. A risk in insurance refers to:
A. Guaranteed loss
B. Possibility of loss
C. Profit certainty
D. Tax liability
Answer: B
Rationale: Risk is uncertainty of loss.
3. Premium is:
A. Refund amount
B. Cost of insurance
C. Claim payment
D. Investment return
Answer: B
Rationale: Payment for coverage.
4. Deductible means:
A. Insurance payout
B. Amount paid before insurance covers loss
,C. Salary
D. Profit
Answer: B
Rationale: Out-of-pocket portion.
5. Insurable interest means:
A. Betting on risk
B. Financial stake in insured item
C. Gambling
D. Tax benefit
Answer: B
Rationale: Legal requirement to insure.
6. Underwriting is:
A. Claim payment
B. Risk assessment process
C. Marketing process
D. Investment process
Answer: B
Rationale: Determines coverage acceptance.
7. Policy is:
A. Loan agreement
B. Insurance contract
C. Tax form
D. Investment fund
Answer: B
Rationale: Legal insurance agreement.
8. Claim is:
A. Premium payment
B. Request for compensation
C. Policy renewal
D. Contract signing
, Answer: B
Rationale: Loss compensation request.
9. Moral hazard refers to:
A. Physical damage
B. Increased risk due to insured behavior
C. Market risk
D. Inflation
Answer: B
Rationale: Behavior changes after insurance.
10. Peril is:
A. Policy document
B. Cause of loss
C. Premium
D. Deductible
Answer: B
Rationale: Event causing damage.
11–20: Types of Insurance
11. Life insurance covers:
A. Property damage
B. Death benefit
C. Car repair
D. Taxes
Answer: B
Rationale: Pays beneficiaries on death.
12. Term life insurance is:
A. Permanent
B. Temporary coverage
C. Investment fund
D. Savings account
CORRECT ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALE 2026 Q&A|INSTANT DOWNLOAD PDF
1–10: Insurance Fundamentals
1. Insurance is primarily used to:
A. Increase profit
B. Transfer risk
C. Avoid savings
D. Eliminate taxes
Answer: B
Rationale: Insurance shifts financial risk from individual to insurer.
2. A risk in insurance refers to:
A. Guaranteed loss
B. Possibility of loss
C. Profit certainty
D. Tax liability
Answer: B
Rationale: Risk is uncertainty of loss.
3. Premium is:
A. Refund amount
B. Cost of insurance
C. Claim payment
D. Investment return
Answer: B
Rationale: Payment for coverage.
4. Deductible means:
A. Insurance payout
B. Amount paid before insurance covers loss
,C. Salary
D. Profit
Answer: B
Rationale: Out-of-pocket portion.
5. Insurable interest means:
A. Betting on risk
B. Financial stake in insured item
C. Gambling
D. Tax benefit
Answer: B
Rationale: Legal requirement to insure.
6. Underwriting is:
A. Claim payment
B. Risk assessment process
C. Marketing process
D. Investment process
Answer: B
Rationale: Determines coverage acceptance.
7. Policy is:
A. Loan agreement
B. Insurance contract
C. Tax form
D. Investment fund
Answer: B
Rationale: Legal insurance agreement.
8. Claim is:
A. Premium payment
B. Request for compensation
C. Policy renewal
D. Contract signing
, Answer: B
Rationale: Loss compensation request.
9. Moral hazard refers to:
A. Physical damage
B. Increased risk due to insured behavior
C. Market risk
D. Inflation
Answer: B
Rationale: Behavior changes after insurance.
10. Peril is:
A. Policy document
B. Cause of loss
C. Premium
D. Deductible
Answer: B
Rationale: Event causing damage.
11–20: Types of Insurance
11. Life insurance covers:
A. Property damage
B. Death benefit
C. Car repair
D. Taxes
Answer: B
Rationale: Pays beneficiaries on death.
12. Term life insurance is:
A. Permanent
B. Temporary coverage
C. Investment fund
D. Savings account
