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Free General Insurance Concepts Practice Questions

Indiana Life exam — 47 practice questions.

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

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Sample questions & answers

1. An insurance policy is described as a contract of adhesion because of what?

One party writes it and the other accepts as written

In a contract of adhesion, the insurer drafts the contract and the applicant generally must accept or reject it as written.

2. The aleatory nature of an insurance contract refers to what?

Unequal values exchanged depending on chance

An aleatory contract involves an exchange of unequal amounts; the insured may pay small premiums yet receive a large benefit, or vice versa.

3. The principle that both parties to an insurance contract rely on each other's honesty is called what?

Utmost good faith

Insurance contracts are based on utmost good faith, requiring honesty and full disclosure from both the applicant and the insurer.

4. An insurance contract is unilateral, which means what?

Only the insurer makes a legally enforceable promise

In a unilateral contract, only the insurer makes a legally enforceable promise to pay, while the insured is not legally obligated to continue premiums.

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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.