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Free General Insurance Concepts Practice Questions

Louisiana Life exam — 47 practice questions.

Subtopics: Pure risk, Peril, Hazard, Law of large numbers, Adverse selection, Contract of adhesion, Aleatory contract, Definition of risk, 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, Utmost good faith, Representations, Concealment, Pure vs speculative risk, 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. In insurance terms, pure risk refers to a situation involving:

Only the chance of loss or no loss with no chance of gain

Pure risk involves only the possibility of loss or no loss and is insurable, unlike speculative risk.

2. A peril is best defined as:

The cause of a loss, such as fire or accident

A peril is the actual cause of a loss, such as fire, accident, or illness.

3. A hazard is:

A condition that increases the likelihood or severity of a loss

A hazard is a condition that increases the chance or severity of a loss, as opposed to the peril that causes it.

4. Insurers rely on the law of large numbers to:

More accurately predict losses across a large group

The law of large numbers lets insurers predict losses more accurately as the number of similar exposure units grows.

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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 Pennsylvania Insurance Department and the exam administrator before relying on it.