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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Hawaii Accident & Health exam — 45 practice questions.

Subtopics: Risk transfer, Law of large numbers, Contract of adhesion, Utmost good faith, Aleatory contract, Risk definition, Morale hazard, Peril, Adverse selection, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Indemnity, Representations, Concealment, 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

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Sample questions & answers

1. Buying health insurance to handle the financial risk of illness is an example of risk:

Transfer

Purchasing insurance transfers the financial consequences of a risk to the insurer.

2. Insurers can predict losses for large groups more accurately because of the:

Law of large numbers

The law of large numbers improves the accuracy of loss predictions as the number of similar exposures grows.

3. A health insurance policy drafted by the insurer and offered to the applicant on a take-it-or-leave-it basis is a contract of:

Adhesion

In a contract of adhesion, the insurer writes the terms and the applicant accepts them as written.

4. The principle requiring both parties to an insurance contract to deal honestly and disclose material facts is:

Utmost good faith

Utmost good faith requires honesty and full disclosure of material facts by both parties.

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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.