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Free General Insurance Concepts Practice Questions

Illinois Life exam — 45 practice questions.

Subtopics: Law of large numbers, Valued contract, Contract of adhesion, Utmost good faith, Aleatory contract, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Consideration, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Indemnity, Representations, Concealment, Pure vs speculative risk, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Unilateral contract, Conditional contract, Warranty, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance

Read the General Insurance Concepts study guide

Sample questions & answers

1. The law of large numbers means that as the number of similar exposures increases an insurer can:

Predict losses more accurately

The law of large numbers lets insurers predict losses more accurately as the pool of similar exposures grows.

2. A life insurance policy is best described as:

A valued contract paying a stated face amount

Life insurance is a valued contract that pays a stated face amount rather than indemnifying an exact loss.

3. Because the insurer writes the policy and the insured accepts it as written the contract is one of:

Adhesion with ambiguities construed against the insurer

An insurance policy is a contract of adhesion so ambiguities are generally construed against the drafting insurer.

4. The principle of utmost good faith in insurance requires:

Honesty and full disclosure by both parties

Utmost good faith requires both parties to deal honestly and disclose material facts.

All Life topics

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.