General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
When an applicant applies for disability insurance, he already has surgery scheduled for the following week. For underwriting purposes, the scheduled surgery is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Insurance covers possible, contingent losses — not losses that are already certain to occur at the time of application. A surgery already scheduled for next week means the loss is a foregone conclusion; there is no uncertainty for the insurer to assume, and the applicant is trying to transfer a loss that has effectively already happened. The insurer will decline the risk or exclude the condition. Insuring it would also create an adverse selection problem, since the applicant only seeks coverage because the loss is imminent.
Why the other options are wrong
- B) The event is not contingent; its occurrence and timing are already fixed, so there is no fortuitous loss to cover.
- C) The scheduled surgery is an existing, certain loss, not merely a hazard that raises the premium.
- D) The risk is not speculative (it offers no chance of gain); it is a certain loss that falls outside the realm of insurable risks.
Memory hook
Certain losses are invoices, not risks. Insurance buys the uncertain, not the already-booked.