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  3. Life, Accident & Health
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

South Dakota Life, Accident & Health exam — 34 practice questions.

Subtopics: Risk pooling, Risk avoidance, Insurable interest, Underwriting purpose, Peril, Consideration, 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. The fundamental way insurance works is by:

Pooling many similar risks so the losses of a few are shared by all

Insurance pools many similar exposures so that the relatively few losses are paid from the premiums of the whole group.

2. A person who refuses to ever fly in order to eliminate any chance of an air-travel loss is using the risk technique of:

Avoidance

Avoidance eliminates the chance of a particular loss by not engaging in the activity that creates the risk.

3. For health insurance purposes, an applicant clearly has insurable interest when insuring:

Their own life and health

A person always has an insurable interest in their own life and health, which supports the validity of the coverage.

4. The main purpose of underwriting in life and health insurance is to:

Classify and select risks so rates are adequate and fair

Underwriting classifies and selects risks so that premiums charged are adequate, equitable, and not unfairly discriminatory.

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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.