1. Exam Prep
  2. South Dakota
  3. Life
  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

South Dakota Life exam — 45 practice questions.

Subtopics: Insurable interest, Adhesion, Aleatory, Valued contract, Law of large numbers, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Consideration, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Indemnity, Utmost good faith, Representations, Concealment, Pure vs speculative risk, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Aleatory contract, Contract of adhesion, 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. For a life insurance contract, insurable interest in the insured must exist:

At the time the policy is applied for and issued

In life insurance, insurable interest must exist at the inception of the policy, not necessarily at the time of loss.

2. An insurance policy is called a contract of adhesion because:

The insurer writes it and the applicant accepts it on a take-it-or-leave-it basis

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

3. Insurance contracts are aleatory because:

No money ever changes hands

In an aleatory contract, the dollar amounts exchanged depend on an uncertain future event and may be unequal.

4. Life insurance is generally considered a valued contract because it pays:

A stated face amount upon the insured's death

A valued contract pays a stated amount, such as the policy's face amount, rather than measuring an actual cash loss.

All Life 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 Insurance Department and the exam administrator before relying on it.