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Free General Insurance Concepts Practice Questions

Washington Life exam — 52 practice questions.

Subtopics: Indemnity, Utmost good faith, Adhesion, Aleatory, Warranty vs representation, Concealment, Law of large numbers, Consideration, Pure risk, Estoppel, Producer authority, Risk management, Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Representations, 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, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance

Read the General Insurance Concepts study guide

Sample questions & answers

1. The principle that a person should not profit from insurance but be restored to their prior position is:

Indemnity

Indemnity restores the insured to the financial position held before the loss, without allowing a profit.

2. Insurance contracts are said to require utmost good faith, meaning:

Both parties rely on each other's honest disclosures

Utmost good faith means both parties depend on the honesty and full disclosure of the other in forming the contract.

3. A life insurance policy is a contract of adhesion because:

The insurer drafts it and the applicant accepts or rejects it

In a contract of adhesion one party writes the terms and the other simply accepts or rejects them, so ambiguities favor the insured.

4. Insurance contracts are aleatory, meaning:

The exchange of value may be unequal depending on chance

An aleatory contract involves an exchange of unequal amounts depending on an uncertain future event.

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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.