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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Alaska Accident & Health exam — 45 practice questions.

Subtopics: Adverse selection, Law of large numbers, Risk retention, Utmost good faith, Indemnity, Risk definition, Morale hazard, Peril, Risk transfer, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Representations, Concealment, Aleatory contract, Contract of adhesion, Pure risk, Speculative risk, Physical hazard, Moral hazard, Implied authority, Fiduciary duty, Warranty, Misrepresentation, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Non-admitted insurer, Alien insurer, Unilateral contract, Conditional contract, Offer and acceptance, Insurable interest

Read the General Insurance Concepts study guide

Sample questions & answers

1. Adverse selection in health insurance is the tendency of:

Higher-risk individuals to seek coverage more than average risks

Adverse selection is the tendency of higher-risk individuals to seek and keep coverage more than average risks.

2. Insurers apply the law of large numbers to:

Predict losses more accurately as the insured group grows

The law of large numbers improves loss prediction as the number of similar exposures increases.

3. Choosing a higher deductible to keep part of a risk is an example of risk:

Retention

Accepting a higher deductible is a form of risk retention because the insured keeps part of the risk.

4. Insurance contracts are said to be based on utmost good faith because:

Both parties rely on each other's honest disclosures

Insurance relies on utmost good faith in which both parties depend on each other's honest disclosures.

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Practice: General Insurance Concepts

Take a randomized, timed-style practice test. Answer choices are shuffled and your results are scored instantly with an explanation for every question.

Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.