State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
A disability policy covers loss of income if the insured becomes totally disabled. Under California Insurance Code Section 250, this event is an insurable event because:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Section 250, an event is insurable when its happening, or the time of its happening, is uncertain. Disability is uncertain in its happening — an insured may never become totally disabled — so it qualifies as an insurable event. This uncertainty is precisely why disability insurance is a genuine insurance contract rather than a savings plan: the insurer bears a real risk that the event will or will not occur, and it prices that risk using morbidity statistics.
Why the other options are wrong
- B) The policy covers the event if it occurs; it does not guarantee that disability will happen at a scheduled time.
- C) Section 250 requires uncertainty, not certainty, of happening or time.
- D) Uncertainty is the entire basis of the insurable-events definition; without it there is no risk to insure.
Memory hook
Will the disability hit, and when? Both are open questions, so both make the event insurable.