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- Life, Accident & Health
- General Insurance Concepts
Free General Insurance Concepts Practice Questions
Michigan Life, Accident & Health exam — 34 practice questions.
Subtopics: Contract of adhesion, Aleatory, Utmost good faith, Consideration, Conditional receipt, Waiver and estoppel, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Unilateral contract, Conditional contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing
Read the General Insurance Concepts study guide
Sample questions & answers
1. An insurance policy is a contract of adhesion because:
The insurer drafts it and the applicant accepts as written
A contract of adhesion is drafted by the insurer and accepted by the applicant as written.
2. Why is an insurance contract considered aleatory?
The amounts exchanged may be unequal
An aleatory contract involves potentially unequal exchanges based on an uncertain event.
3. The reliance on honesty and full disclosure by both parties is the principle of:
Utmost good faith
Insurance contracts rest on utmost good faith, requiring honesty and disclosure.
4. The insured's consideration in the contract is:
The premium and statements in the application
The insured's consideration is the premium payment plus the statements made in the application.
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Practice: General Insurance Concepts
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