State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An applicant already diagnosed with an incurable illness wants a policy that will pay the known treatment costs. Under California Insurance Code Section 250, this known illness is:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 250 requires an insurable event to be contingent or unknown. A diagnosed, incurable illness with known treatment costs is neither — the loss is certain to occur. Insurance cannot cover an event already in progress with a guaranteed payout; that would be a savings or payment plan, not insurance. This rule also supports preexisting condition underwriting restrictions in health coverage.
Why the other options are wrong
- B) Sickness is not automatically insurable; the event must be uncertain, and a known existing illness fails that test.
- C) No rider can convert a certain, known loss into an insurable event; the statute's uncertainty requirement applies to the whole contract.
- D) Accepting a premium does not cure the absence of an insurable event; the event must be contingent or unknown at inception.
Memory hook
Already sick and certain = not an insurable event. Section 250 wants a 'maybe,' not a 'definitely.'