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Free General Insurance Concepts Practice Questions

Michigan Life exam — 46 practice questions.

Subtopics: Contract of adhesion, Aleatory contract, Utmost good faith, Consideration, Concealment, Insurable interest parties, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Indemnity, Representations, Pure vs speculative risk, Law of large numbers, Adverse selection, 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. A life insurance policy is a contract of adhesion because:

The insurer writes it and the applicant accepts as written

A contract of adhesion is drafted by one party (the insurer) and accepted by the other on a take-it-or-leave-it basis.

2. An insurance contract is aleatory because:

Values exchanged may be unequal

An aleatory contract involves an exchange of unequal amounts depending on an uncertain event.

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

Utmost good faith

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

4. The consideration given by an insured in an insurance contract is the:

Payment of premium and statements in the application

The insured's consideration consists of the premium payment and the statements made in the application.

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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.