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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

New Jersey Life, Accident & Health exam — 30 practice questions.

Subtopics: Peril vs hazard, Pure risk, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, 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. A condition that increases the chance or severity of a loss is a:

Hazard

A hazard increases the likelihood or severity of a loss; a peril is the actual cause of loss.

2. Insurance is concerned with which type of risk?

Pure risk

Insurance covers pure risk, which involves only the chance of loss or no loss, not gain.

3. Buying a life insurance policy is an example of which method of handling risk?

Transfer

Insurance transfers the financial risk of premature death from the insured to the insurer.

4. Choosing not to engage in an activity so its risk never arises is:

Avoidance

Avoidance eliminates the exposure by not undertaking the risky activity.

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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.