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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Vermont Life, Accident & Health exam — 36 practice questions.

Subtopics: Speculative risk, Physical hazard, Risk avoidance, Unilateral contract, Consideration, Concealment, Waiver, Warranty, 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, Conditional contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing

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Sample questions & answers

1. A risk that involves the chance of loss, no loss, or gain, such as gambling, is called:

Speculative risk

Speculative risk includes the possibility of gain and is not insurable, unlike pure risk.

2. A slippery floor or an icy walkway is an example of a:

A physical hazard

A physical hazard is a tangible condition that increases the chance or severity of a loss.

3. A person who decides never to fly in order to eliminate the chance of an airplane crash is using which risk management technique?

Risk avoidance

Avoidance eliminates exposure to a risk by not engaging in the activity that creates it.

4. An insurance policy is called a unilateral contract because:

Only the insurer makes a legally enforceable promise to pay

In a unilateral contract only one party, the insurer, makes a legally enforceable promise.

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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.