General Insurance PrinciplesQuestion 178 of 315
Under the California Insurance Code, insurance is best described as which of the following?
a.An investment vehicle that guarantees a return on premium
b.A government program that pays benefits to all residents
c.A contract whereby one party undertakes to indemnify another against loss from a contingent event
d.A savings account that accumulates tax-free interest
Explanation
Cal. Ins. Code §22 defines insurance as a contract whereby one undertakes to indemnify another or pay a specified amount upon determinable contingencies. It is not an investment guarantee, a government program, or a savings account.
Law Reference: Cal. Ins. Code §22Practice all 315 questions free — no signup required.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)