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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Kentucky Accident & Health exam — 45 practice questions.

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

Those with a greater likelihood of loss to seek coverage more than others

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

2. Insurers apply the law of large numbers to:

Predict losses more accurately across a large insured group

The law of large numbers allows insurers to predict losses more accurately as the number of similar insureds grows.

3. The principle of indemnity in health insurance means coverage is intended to:

Restore the insured toward their pre-loss financial position without profit

The principle of indemnity seeks to make the insured whole without allowing a financial gain from the loss.

4. Choosing not to engage in a hazardous activity at all is an example of risk:

Avoidance

Risk avoidance eliminates exposure by not undertaking the activity that creates the risk.

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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.