1. Exam Prep
  2. New Jersey
  3. Accident & Health
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

New Jersey Accident & Health exam — 43 practice questions.

Subtopics: Adverse selection, Indemnity, Law of large numbers, Risk definition, Morale hazard, Peril, Risk transfer, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Utmost good faith, 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. In health insurance, adverse selection is the tendency of:

Less healthy individuals to seek coverage disproportionately

Adverse selection occurs when higher-risk individuals seek coverage more than average risks.

2. The principle of indemnity is intended to:

Restore the insured to the pre-loss financial position

Indemnity restores the insured to their pre-loss condition without allowing a profit from the loss.

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

Predict aggregate losses more accurately

A larger pool of similar exposures makes predicted losses more accurate and premiums more stable.

4. In insurance terms, risk refers to:

Uncertainty regarding the possibility of loss

Risk is the uncertainty of loss; insurance is designed to handle pure risk (chance of loss or no loss).

All Accident & Health 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 Pennsylvania Insurance Department and the exam administrator before relying on it.