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Free General Insurance Concepts Practice Questions

Hawaii Life, Accident & Health exam — 33 practice questions.

Subtopics: Speculative risk, Risk retention, Unilateral contract, Conditional contract, Reinsurance, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Express authority, Apparent authority, Fiduciary duty, Reciprocal insurer, Estoppel, Insurable interest timing

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Sample questions & answers

1. Speculative risk, unlike pure risk, involves:

The chance of loss, no loss, or gain, and is generally not insurable

Speculative risk carries the possibility of gain as well as loss and is generally not insurable.

2. An individual who chooses to pay small losses out of pocket rather than insure them is using risk:

Retention

Risk retention means keeping the financial responsibility for a loss rather than transferring it.

3. An insurance policy is a unilateral contract because:

Only the insurer makes a legally enforceable promise

In a unilateral contract, only the insurer makes a legally enforceable promise to pay covered claims.

4. An insurance contract is conditional, meaning:

Certain conditions must be met before the insurer pays a claim

A conditional contract requires that stated conditions, such as paying premiums and filing proof of loss, be met.

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Practice: General Insurance Concepts

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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.