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CII M05 real answers - Insurance law (IL) Exam

M05
  • Exam Code: M05
  • Exam Name: Insurance law (IL) Exam
  • Updated: Nov 12, 2025
  • Q & A: 121 Questions and Answers
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CII Insurance law (IL) Sample Questions:

1. A claimant may possibly recover money transferred under an illegal contract when

A) the illegality makes the contract voidable rather than void.
B) the legal portion of the contract can be severed from the illega portion.
C) both parties to the contract are equal in wrongdoing.
D) the contract is against public policy but not substantive law.


2. Which of the following is true regarding the insurable interest in life insurance?

A) The policyholder must have a financial interest in the property of the person insured
B) Insurable interest is not required for life insurance policies
C) The policyholder must have a financial interest in the life of the person insured
D) Insurable interest is required only at the time the policy is issued


3. When an insurer is aware that the total value of stock is more than the sum insured and issues a policy on this basis, this is known as

A) an indemnity policy.
B) a new for old policy.
C) a first loss policy.
D) a real statement.


4. Under the principle of indemnity, what is the objective of an insurance contract?

A) To ensure the insured receives full compensation for their loss regardless of the circumstances
B) To restore the insured to the same financial position they were in before the loss
C) To protect the insurer from fraudulent claims
D) To ensure the insured profits from the loss


5. Insurance agencies are usually created by way of

A) deed of agreement.
B) implied agreement.
C) unilateral agreement.
D) express agreement.


Solutions:

Question # 1
Answer: C
Question # 2
Answer: C
Question # 3
Answer: C
Question # 4
Answer: B
Question # 5
Answer: D

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