General Level 1 Insurance License
Alberta Test Questions and Actual
Answers 2025-2026 Edition.
accident and health (sickness) insurance - Answer A form of insurance compensating an
individual for loss as a result of an accident or illness. It may pay certain or all expenses for
medical and similar services and a weekly or monthly indemnity for loss of income. The
amounts and items covered vary from policy to policy and depend to some extent on what
coverage is purchased by the insured.
accident basis - Answer The injury or damage must be due to an event that is sudden,
unintended (not deliberate), and unexpected.
accident frequency - Answer The determination of how often the rate or frequency of
accidents occur at a particular operation, site, or location, or to the insured as a whole, for a
specified period of time for the exposure units involved.
accidental death and dismemberment insurance - Answer Form of accident insurance that
indemnifies or pays a stated benefit to the insured or his/her beneficiary in the event of bodily
injury or death due to accidental means (other than natural causes).
actual cash value (ACV) - Answer The fair market value of property, taking into account factors
that might augment or reduce the value of the property in question. Actual cash value (ACV) is
usually calculated in one of three ways: (1) cost to repair or replace less depreciation; (2) fair
market value; or (3) consideration of all relevant evidence of the value of the damaged property.
adjustable premium - Answer An insurance premium that can move up or down over time
based on a policy that is agreed to at the outset of an insurance contract. There are several
factors that may cause adjustable premiums to change, including the varying costs of
maintaining the contracts. Also known as a "variable premium."
adjuster - Answer One who investigates insurance claims, makes recommendations regarding
the payment of benefits from insurance policies, and negotiates payments and settlements.
agency contract - Answer A contract that allows one person to employ another to do her or his
work, sell her or his goods, and acquire property on her or his behalf as if the employer were
present and acting in person. The principal may authorize the agent to perform a variety of
,agent - Answer A person who is employed or authorized to act on behalf of another. Agents
can be independent or direct writers. An independent agent is one who contracts with at least
two or more insurance companies to sell their insurance policies to the public and is paid a
commission based on the percentage of each premium paid. This includes a fee for each policy
serviced. A direct agent represents only one company and sells for only one company.
aggregate - Answer The aggregate amount represents the total limit payable in any one policy
period. It can apply to the entire policy or may only apply to losses arising from specific sections
such as products or completed operations. Unlike most property policies, there is no automatic
reinstatement of the limits of insurance under the CGL; once the aggregate limit is exhausted
there is no more coverage.
all-risks policy - Answer A name given to an insurance policy that covers each and every loss
except for those that are specifically excluded. If the insurer does not exclude it, then it is
automatically covered. This is the broadest type of policy that can be purchased. It is contrary to
specified perils coverage, which is written to insure damage to property caused by specific
"named perils," which are listed on the policy.
any occupation definition of disability - Answer The insured's eligibility for benefits depends
on the inability to work in any occupation for which that individual is reasonably suited by
education, training, or experience.
asset - Answer Property of all kinds, real or financial, that belongs to a person or corporation
or to the estate of a decedent. An asset is anything that has financial value including cash, bank
balances, investments, proceeds of a life insurance policy, vehicles, real estate, household
goods, and personal effects. The total of an individual's property is referred to as that person's
assets.
bailee - Answer in contract and property law, one to whom goods or property are entrusted
for a stated purpose. Can be either gratuitous (for no consideration) or for hire (for
consideration).
bailees - Answer Bailees such as dry cleaners are liable for customers' goods while in
possession of them. The description of property will indicate whether the policy covers only the
insured's interest as bailee or the joint interest of the insured (as bailee) and the customers (as
owners of the goods).
bailors - Answer Persons who entrust goods to another.
, benefit period - Answer Provision in group disability plan providing that benefits will be
reduced, or that overpayments will be repaid to the group carrier, in the event that the plan
member receives disability benefits from other sources including other group policies or
government plans.
bid bond - Answer Guarantees that, in the event his or her bid is accepted, a contractor will
sign the contract to do the job as per the bid and frequently will be able to furnish a
performance bond as well.
binding authority - Answer A broker's capacity to confirm to applicants that they have
coverage against certain losses.
bodily injury - Answer A term used in auto and liability policies meaning physical injury,
including sickness, disease, mental injury, shock, or death.
bond - Answer A three-party agreement whereby one party, the surety, is bound with the
person bonded, the principal, unto a third party, called the obligee.
broker - Answer A licensed independent person or firm who acts on behalf of an insured in
placing business with insurance companies.
business income - Answer The sum of the variable operating expenses and amounts of
opening stock and work in progress subtracted from the sum of the revenue and amounts of
closing stock and work in progress.
business income coverage - Answer Business interruption insurance that indemnifies an
insured for loss of business income.
cede - Answer An insurer's transferral or signing over part of an insurance risk to a reinsurer.
certificate of insurance - Answer Written document stating that insurance is in effect. Includes
general statement of policy's coverage.
cession - Answer That which is ceded; for example, a reinsurance item.
Alberta Test Questions and Actual
Answers 2025-2026 Edition.
accident and health (sickness) insurance - Answer A form of insurance compensating an
individual for loss as a result of an accident or illness. It may pay certain or all expenses for
medical and similar services and a weekly or monthly indemnity for loss of income. The
amounts and items covered vary from policy to policy and depend to some extent on what
coverage is purchased by the insured.
accident basis - Answer The injury or damage must be due to an event that is sudden,
unintended (not deliberate), and unexpected.
accident frequency - Answer The determination of how often the rate or frequency of
accidents occur at a particular operation, site, or location, or to the insured as a whole, for a
specified period of time for the exposure units involved.
accidental death and dismemberment insurance - Answer Form of accident insurance that
indemnifies or pays a stated benefit to the insured or his/her beneficiary in the event of bodily
injury or death due to accidental means (other than natural causes).
actual cash value (ACV) - Answer The fair market value of property, taking into account factors
that might augment or reduce the value of the property in question. Actual cash value (ACV) is
usually calculated in one of three ways: (1) cost to repair or replace less depreciation; (2) fair
market value; or (3) consideration of all relevant evidence of the value of the damaged property.
adjustable premium - Answer An insurance premium that can move up or down over time
based on a policy that is agreed to at the outset of an insurance contract. There are several
factors that may cause adjustable premiums to change, including the varying costs of
maintaining the contracts. Also known as a "variable premium."
adjuster - Answer One who investigates insurance claims, makes recommendations regarding
the payment of benefits from insurance policies, and negotiates payments and settlements.
agency contract - Answer A contract that allows one person to employ another to do her or his
work, sell her or his goods, and acquire property on her or his behalf as if the employer were
present and acting in person. The principal may authorize the agent to perform a variety of
,agent - Answer A person who is employed or authorized to act on behalf of another. Agents
can be independent or direct writers. An independent agent is one who contracts with at least
two or more insurance companies to sell their insurance policies to the public and is paid a
commission based on the percentage of each premium paid. This includes a fee for each policy
serviced. A direct agent represents only one company and sells for only one company.
aggregate - Answer The aggregate amount represents the total limit payable in any one policy
period. It can apply to the entire policy or may only apply to losses arising from specific sections
such as products or completed operations. Unlike most property policies, there is no automatic
reinstatement of the limits of insurance under the CGL; once the aggregate limit is exhausted
there is no more coverage.
all-risks policy - Answer A name given to an insurance policy that covers each and every loss
except for those that are specifically excluded. If the insurer does not exclude it, then it is
automatically covered. This is the broadest type of policy that can be purchased. It is contrary to
specified perils coverage, which is written to insure damage to property caused by specific
"named perils," which are listed on the policy.
any occupation definition of disability - Answer The insured's eligibility for benefits depends
on the inability to work in any occupation for which that individual is reasonably suited by
education, training, or experience.
asset - Answer Property of all kinds, real or financial, that belongs to a person or corporation
or to the estate of a decedent. An asset is anything that has financial value including cash, bank
balances, investments, proceeds of a life insurance policy, vehicles, real estate, household
goods, and personal effects. The total of an individual's property is referred to as that person's
assets.
bailee - Answer in contract and property law, one to whom goods or property are entrusted
for a stated purpose. Can be either gratuitous (for no consideration) or for hire (for
consideration).
bailees - Answer Bailees such as dry cleaners are liable for customers' goods while in
possession of them. The description of property will indicate whether the policy covers only the
insured's interest as bailee or the joint interest of the insured (as bailee) and the customers (as
owners of the goods).
bailors - Answer Persons who entrust goods to another.
, benefit period - Answer Provision in group disability plan providing that benefits will be
reduced, or that overpayments will be repaid to the group carrier, in the event that the plan
member receives disability benefits from other sources including other group policies or
government plans.
bid bond - Answer Guarantees that, in the event his or her bid is accepted, a contractor will
sign the contract to do the job as per the bid and frequently will be able to furnish a
performance bond as well.
binding authority - Answer A broker's capacity to confirm to applicants that they have
coverage against certain losses.
bodily injury - Answer A term used in auto and liability policies meaning physical injury,
including sickness, disease, mental injury, shock, or death.
bond - Answer A three-party agreement whereby one party, the surety, is bound with the
person bonded, the principal, unto a third party, called the obligee.
broker - Answer A licensed independent person or firm who acts on behalf of an insured in
placing business with insurance companies.
business income - Answer The sum of the variable operating expenses and amounts of
opening stock and work in progress subtracted from the sum of the revenue and amounts of
closing stock and work in progress.
business income coverage - Answer Business interruption insurance that indemnifies an
insured for loss of business income.
cede - Answer An insurer's transferral or signing over part of an insurance risk to a reinsurer.
certificate of insurance - Answer Written document stating that insurance is in effect. Includes
general statement of policy's coverage.
cession - Answer That which is ceded; for example, a reinsurance item.
