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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Ohio Life, Accident & Health exam — 28 practice questions.

Subtopics: 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. 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.

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

Avoidance

Avoidance eliminates the exposure by not undertaking the risky activity.

3. Paying small, expected losses out of one's own funds is the technique of:

Retention

Retention means self-funding a portion of risk rather than transferring it.

4. Which is a characteristic of an ideally insurable risk?

The loss is definite, measurable, and due to chance

Insurable risks involve fortuitous, measurable losses that are not catastrophic to the entire pool simultaneously.

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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 Pennsylvania Insurance Department and the exam administrator before relying on it.