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  3. Accident & Health
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Massachusetts Accident & Health exam — 45 practice questions.

Subtopics: Indemnity, Adverse selection, Law of large numbers, Utmost good faith, Risk management, Risk definition, Morale hazard, Peril, Risk transfer, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Representations, 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. The principle of indemnity provides that an insured should be:

Restored to the approximate financial position held before the loss

Indemnity seeks to restore the insured to the financial position held before the loss, without profit.

2. Adverse selection in health insurance refers to the tendency of:

Those with greater likelihood of loss to seek or keep coverage

Adverse selection is the tendency of higher-risk individuals to seek insurance more than lower-risk individuals.

3. Insurers can predict losses more accurately as the number of similar exposure units increases because of the:

Law of large numbers

The law of large numbers holds that larger pools of similar exposures make loss prediction more reliable.

4. The principle that both parties to an insurance contract rely on honesty and full disclosure is:

Utmost good faith

Insurance contracts are based on utmost good faith, requiring honesty and full disclosure by both parties.

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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.