1. Exam Prep
  2. Maryland
  3. Life
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Maryland Life exam — 47 practice questions.

Subtopics: Contract of adhesion, Aleatory contract, Utmost good faith, Representations, Concealment, Warranty, Estoppel, 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, Pure vs speculative risk, Law of large numbers, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Unilateral contract, Conditional contract, Waiver, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance

Read the General Insurance Concepts study guide

Sample questions & answers

1. An insurance policy is a contract of adhesion, meaning:

It is written by the insurer and accepted as-is by the applicant

Because the insurer drafts the contract and the applicant adheres to its terms, ambiguities are generally construed against the insurer.

2. An insurance contract is aleatory because:

Values exchanged may be unequal depending on chance

An aleatory contract involves an exchange of unequal values dependent on an uncertain event, such as a loss.

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

Utmost good faith

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

4. Statements made by an applicant that are believed to be true to the best of their knowledge are:

Representations

Representations are statements believed true to the best of the applicant's knowledge; material misrepresentation can void coverage.

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.