Alberta General Insurance Level 1 Exam, Practice Exam And Study Guide (3 VERSIONS)
EXAM NEWEST 2026 (GRADED A+ 100% VERIFIED ANSWERS)
Insurance documentation is a source of evidence of what took place with a certain policy.
Should a dispute arise, consistent, accurate record-keeping can provide information about
a) privacy laws
b) policy retention standards
c) what instructions were given or what promises were made
d) commission structures - ANSWER-c) what instructions were given or what promises were
made
Which of the following is true about the form of organization that an insurer may take?
a) A joint stock company is owned by its policy holders
b) A farm mutual insurance company is owned exclusively by farmers who buy shares in the
company
c) Lloyds of London is NOT an insurance company; it is a place where underwriters
undertake to insure risks
d) Mutual insurance companies are NOT required to be licensed under the Insurance Act -
ANSWER-c) Lloyds of London is NOT an insurance company; it is a place where underwriters
undertake to insure risks
,Insurance allows people to live their lives and carry on their business without the fear that
some single catastrophe or natural disaster could physically and financially ruin them. Which
of the following best defines "insurance"?
a) It is minimization of detrimental effects of risk
b) It is the method of sharing the losses of the few individuals in a group who suffer them
among the many members of the group who do not
c) It influences the outcome of a loss
d) It is based on risk or uncertainty - ANSWER-b) It is the method of sharing the losses of
the few individuals in a group who suffer them among the many members of the group who
do not
Many large insurers market their policies through the independent brokerage system. An
independent broker is
a) one who has authority from a company to manage all of that company's business within
his or her territory
b) one who has authority from a company to appoint other agents and to settle claims
c) one who represents only one company
d) a business person who may place business with any number of insurers - ANSWER-d) a
business person who may place business with any number of insurers
The insurance industry manages large pools of money from premiums which are generally
paid in advance. This capital has a positive influence on the economy. An example of this is
,a) insurers invest in federal, provincial and municipal bonds, thus recycling premiums into
community development
b) the peace of mind that results when substituting a known premium payment for an
uncertain loss payment
c) businesses must set aside reserves of money in case of a future loss or accident
d) insurance protects the insured's interests in property, but excludes the lender's
investment - ANSWER-a) insurers invest in federal, provincial and municipal bonds, thus
recycling premiums into community development
Which of the following statements is TRUE with respect to travel insurance?
a) It replaces insurance provided by a government plan
b) It does not normally provide coverage where an illness existed prior to the trip
commencing
c) It pays before any other coverage when the insured is travelling outside of Canada
d) It covers unexpected events as well as expected events, such as pregnancy - ANSWER-b)
It does not normally provide coverage where an illness existed prior to the trip commencing
What is the best definition of "pure risk" as used for insurance purposes?
a) Must always be dealt with through reduction or elimination
b) The chance of loss
c) A condition which may cause a loss to occur
d) The possibility of property being over-insured - ANSWER-b) The chance of loss
, It is your responsibility as a broker to assist individual insurance consumers to determine
the best insurance program for them. A risk analysis is an effective tool to
a) retain, organize and file your notes
b) clarify information provided by your client
c) determine property items at risk as well as the likelihood of events happening
d) describe the differences between named perils and all-risk wordings - ANSWER-c)
determine property items at risk as well as the likelihood of events happening
In insurance terms, a peril is frequently described as a cause of loss. Which of the following
is NOT a peril?
a) Lightning
b) a wood-burning stove used for heating
c) Windstorm
d) Burglary - ANSWER-b) a wood-burning stove used for heating
You have requested a flow chart from your client to assist you in identifying exposures to
loss. A flow chart maps the sequence of business activities using graphic representation.
One of the main benefits of a flow chart is its ability to
a) describe in detail the subjects of insurance
EXAM NEWEST 2026 (GRADED A+ 100% VERIFIED ANSWERS)
Insurance documentation is a source of evidence of what took place with a certain policy.
Should a dispute arise, consistent, accurate record-keeping can provide information about
a) privacy laws
b) policy retention standards
c) what instructions were given or what promises were made
d) commission structures - ANSWER-c) what instructions were given or what promises were
made
Which of the following is true about the form of organization that an insurer may take?
a) A joint stock company is owned by its policy holders
b) A farm mutual insurance company is owned exclusively by farmers who buy shares in the
company
c) Lloyds of London is NOT an insurance company; it is a place where underwriters
undertake to insure risks
d) Mutual insurance companies are NOT required to be licensed under the Insurance Act -
ANSWER-c) Lloyds of London is NOT an insurance company; it is a place where underwriters
undertake to insure risks
,Insurance allows people to live their lives and carry on their business without the fear that
some single catastrophe or natural disaster could physically and financially ruin them. Which
of the following best defines "insurance"?
a) It is minimization of detrimental effects of risk
b) It is the method of sharing the losses of the few individuals in a group who suffer them
among the many members of the group who do not
c) It influences the outcome of a loss
d) It is based on risk or uncertainty - ANSWER-b) It is the method of sharing the losses of
the few individuals in a group who suffer them among the many members of the group who
do not
Many large insurers market their policies through the independent brokerage system. An
independent broker is
a) one who has authority from a company to manage all of that company's business within
his or her territory
b) one who has authority from a company to appoint other agents and to settle claims
c) one who represents only one company
d) a business person who may place business with any number of insurers - ANSWER-d) a
business person who may place business with any number of insurers
The insurance industry manages large pools of money from premiums which are generally
paid in advance. This capital has a positive influence on the economy. An example of this is
,a) insurers invest in federal, provincial and municipal bonds, thus recycling premiums into
community development
b) the peace of mind that results when substituting a known premium payment for an
uncertain loss payment
c) businesses must set aside reserves of money in case of a future loss or accident
d) insurance protects the insured's interests in property, but excludes the lender's
investment - ANSWER-a) insurers invest in federal, provincial and municipal bonds, thus
recycling premiums into community development
Which of the following statements is TRUE with respect to travel insurance?
a) It replaces insurance provided by a government plan
b) It does not normally provide coverage where an illness existed prior to the trip
commencing
c) It pays before any other coverage when the insured is travelling outside of Canada
d) It covers unexpected events as well as expected events, such as pregnancy - ANSWER-b)
It does not normally provide coverage where an illness existed prior to the trip commencing
What is the best definition of "pure risk" as used for insurance purposes?
a) Must always be dealt with through reduction or elimination
b) The chance of loss
c) A condition which may cause a loss to occur
d) The possibility of property being over-insured - ANSWER-b) The chance of loss
, It is your responsibility as a broker to assist individual insurance consumers to determine
the best insurance program for them. A risk analysis is an effective tool to
a) retain, organize and file your notes
b) clarify information provided by your client
c) determine property items at risk as well as the likelihood of events happening
d) describe the differences between named perils and all-risk wordings - ANSWER-c)
determine property items at risk as well as the likelihood of events happening
In insurance terms, a peril is frequently described as a cause of loss. Which of the following
is NOT a peril?
a) Lightning
b) a wood-burning stove used for heating
c) Windstorm
d) Burglary - ANSWER-b) a wood-burning stove used for heating
You have requested a flow chart from your client to assist you in identifying exposures to
loss. A flow chart maps the sequence of business activities using graphic representation.
One of the main benefits of a flow chart is its ability to
a) describe in detail the subjects of insurance
