- A
Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy.
ADE relies on the Azure Disk Encryption service principal to access the encryption key. You must grant this principal the 'get', 'wrapKey', and 'unwrapKey' permissions in the access policy.
- B
Assign a managed identity to each VM and grant that identity key permissions in the Key Vault.
Why wrong: While managed identities are used with newer encryption options (e.g., encryption at host), classic ADE does not use the VM's managed identity; it uses the Azure Disk Encryption service principal.
- C
Enable soft-delete and purge protection on the Key Vault.
Why wrong: Soft-delete and purge protection are recommended to prevent accidental key deletion, but they are not prerequisites for the encryption process to work.
- D
Assign the 'Key Vault Contributor' RBAC role to the Azure Disk Encryption service principal.
Why wrong: RBAC roles like 'Key Vault Contributor' grant management plane access, not the data plane key operations needed for encryption. The access policy must define specific key permissions.
Quick Answer
The correct answer is to grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) the 'Get', 'WrapKey', and 'UnwrapKey' key permissions in the Key Vault access policy. This is necessary because Azure Disk Encryption relies on this specific platform-managed service principal to authenticate and perform cryptographic operations against the vault; without these permissions, ADE cannot retrieve the encryption key or wrap and unwrap the disk encryption secrets. On the AZ-500 exam, this question tests your understanding of how Azure platform services interact with Key Vault via service principals, often appearing as a trick where candidates mistakenly grant permissions to a user or VM managed identity instead of the correct Microsoft.Azure.Security principal. A common trap is assuming the VM’s own identity handles the encryption, but ADE always uses the platform’s built-in principal. Memory tip: think “ADE needs the three K’s—Get, Wrap, Unwrap—for the Security principal.”
AZ-500 Secure compute, storage, and databases Practice Question
This AZ-500 practice question tests your understanding of secure compute, storage, and databases. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company plans to enable Azure Disk Encryption (ADE) on a fleet of Windows virtual machines. They want to use a key stored in Azure Key Vault to encrypt the disks. Which additional access configuration must be made in the Key Vault to allow ADE to succeed?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy.
Azure Disk Encryption (ADE) uses the Azure platform's built-in service principal (Microsoft.Azure.Security) to access the Key Vault and retrieve the disk encryption key. Without granting this service principal the necessary 'Get', 'WrapKey', and 'UnwrapKey' key permissions in the Key Vault access policy, ADE cannot authenticate and perform the encryption operations. This is a mandatory configuration step for ADE to succeed.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy.
Why this is correct
ADE relies on the Azure Disk Encryption service principal to access the encryption key. You must grant this principal the 'get', 'wrapKey', and 'unwrapKey' permissions in the access policy.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Assign a managed identity to each VM and grant that identity key permissions in the Key Vault.
Why it's wrong here
While managed identities are used with newer encryption options (e.g., encryption at host), classic ADE does not use the VM's managed identity; it uses the Azure Disk Encryption service principal.
- ✗
Enable soft-delete and purge protection on the Key Vault.
Why it's wrong here
Soft-delete and purge protection are recommended to prevent accidental key deletion, but they are not prerequisites for the encryption process to work.
- ✗
Assign the 'Key Vault Contributor' RBAC role to the Azure Disk Encryption service principal.
Why it's wrong here
RBAC roles like 'Key Vault Contributor' grant management plane access, not the data plane key operations needed for encryption. The access policy must define specific key permissions.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse the need to grant permissions to the VM's managed identity (Option B) with the actual requirement to grant permissions to the Azure Disk Encryption service principal, because ADE does not use the VM's identity to access the Key Vault.
Detailed technical explanation
How to think about this question
Under the hood, ADE leverages the Azure platform's service principal (Microsoft.Azure.Security) to authenticate to Azure Key Vault via Azure Active Directory. The service principal must have explicit 'Get', 'WrapKey', and 'UnwrapKey' permissions on the key used for encryption, as defined in the Key Vault access policy. In a real-world scenario, if the Key Vault is in a different subscription or tenant, you must also ensure the service principal is registered in that tenant, which can cause cross-tenant encryption failures.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this AZ-500 question test?
Secure compute, storage, and databases — This question tests Secure compute, storage, and databases — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy. — Azure Disk Encryption (ADE) uses the Azure platform's built-in service principal (Microsoft.Azure.Security) to access the Key Vault and retrieve the disk encryption key. Without granting this service principal the necessary 'Get', 'WrapKey', and 'UnwrapKey' key permissions in the Key Vault access policy, ADE cannot authenticate and perform the encryption operations. This is a mandatory configuration step for ADE to succeed.
What should I do if I get this AZ-500 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
3 more ways this is tested on AZ-500
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company plans to enable Azure Disk Encryption (ADE) on their Windows virtual machines. They will use a Key Encryption Key (KEK) stored in Azure Key Vault. What additional configuration must be made in the Key Vault to allow the Azure platform to access the KEK for encrypting the VM disks?
hard- A.Grant the Azure Disk Encryption service principal 'Reader' role on the key vault.
- ✓ B.Set the key vault's 'enabledForDiskEncryption' property to true.
- C.Grant the virtual machine's managed identity 'Contributor' role on the key vault.
- D.Configure soft-delete and purge protection on the key vault.
Why B: Option B is correct because Azure Disk Encryption requires the key vault's 'enabledForDiskEncryption' property to be set to true. This property explicitly authorizes the Azure platform (specifically the Azure Disk Encryption service) to access the Key Encryption Key (KEK) stored in the vault for encrypting VM disks. Without this flag, the platform cannot retrieve the KEK, even if other permissions exist.
Variation 2. A company plans to enable Azure Disk Encryption (ADE) on a set of Windows virtual machines using a Key Encryption Key (KEK) stored in Azure Key Vault. They have enabled soft-delete and purge protection on the Key Vault. The encryption fails with an error indicating that the key vault does not have the required permissions. Which additional configuration is most likely required for ADE to use the KEK?
medium- ✓ A.Configure the key vault access policy to grant the Azure Disk Encryption service (or the VM's managed identity) the 'Key Vault Crypto Service Encryption User' role.
- B.Enable the key vault for deployment by setting the 'Enabled for deployment' access policy.
- C.Enable the key vault for disk encryption by setting the 'Enabled for Azure Disk Encryption' access policy.
- D.Add the 'Storage Account Contributor' role for the VMs to access the key vault.
Why A: Azure Disk Encryption (ADE) requires the Key Vault to have an access policy that grants the Azure Disk Encryption service (or the VM's managed identity) the 'Key Vault Crypto Service Encryption User' role. This role provides the necessary cryptographic permissions (e.g., 'wrapKey' and 'unwrapKey') to use the Key Encryption Key (KEK) for encrypting and decrypting the Disk Encryption Key (DEK). Without this specific role assignment, the encryption operation fails with a permissions error, even if soft-delete and purge protection are enabled.
Variation 3. A company wants to enable Azure Disk Encryption (ADE) on their Windows virtual machines using a Key Encryption Key (KEK) stored in Azure Key Vault. They have created the Key Vault with soft-delete enabled and a key. However, the encryption fails. What is the most likely missing configuration that prevents ADE from using the KEK?
hard- ✓ A.The Key Vault does not have the 'Azure Disk Encryption for Azure VMs' access policy.
- B.The Key Vault does not allow access from the Azure platform.
- C.The Key Vault firewall is enabled and blocking access from Azure services.
- D.The Key Vault does not have the system-assigned managed identity of the VM enabled.
Why A: Azure Disk Encryption (ADE) requires the Key Vault to have an explicit access policy granting the 'Azure Disk Encryption for Azure VMs' service principal (or the equivalent Azure RBAC role) permission to wrap and unwrap keys. Without this policy, the ADE extension cannot use the KEK to protect the encryption keys, even if the Key Vault itself is correctly configured with soft-delete and a key.
Last reviewed: Jun 11, 2026
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