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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Vermont Accident & Health exam — 42 practice questions.

Subtopics: Morale hazard, Reimbursement, Risk definition, Peril, Risk transfer, Adverse selection, Stock insurer, Mutual insurer, Admitted insurer, Foreign insurer, Consideration, Legal purpose, Competent parties, Express authority, Apparent authority, Indemnity, Utmost good faith, Representations, Concealment, Aleatory contract, Contract of adhesion, Pure risk, Speculative risk, Law of large numbers, 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. An insured who becomes careless about their health simply because they have coverage demonstrates a:

Morale hazard

A morale hazard is an attitude of carelessness or indifference that arises because a person has insurance.

2. A health insurance benefit that pays the insured back for actual covered expenses incurred reflects the principle of:

Indemnity, or reimbursement

Reimbursement (indemnity) benefits restore the insured for actual covered expenses rather than paying a fixed sum regardless of cost.

3. 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).

4. An insured's careless attitude that increases the chance of loss because they have insurance is a:

Morale hazard

A morale hazard is an indifferent attitude toward loss arising because the insured has coverage.

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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.