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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

Wisconsin Accident & Health exam — 45 practice questions.

Subtopics: Risk pooling, Pure risk, Adverse selection, Conditional contract, Unilateral contract, Risk definition, Morale hazard, Peril, Risk transfer, 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, 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, Offer and acceptance, Insurable interest

Read the General Insurance Concepts study guide

Sample questions & answers

1. Insurance works by spreading risk through:

Pooling premiums from many to pay the losses of a few

Insurance pools premiums from many insureds to fund the losses experienced by the few, spreading risk.

2. Pure risk, which is insurable, involves:

Only the chance of loss or no loss, with no chance of gain

Pure risk involves only loss or no loss and is insurable, unlike speculative risk which includes a chance of gain.

3. Health insurers use underwriting largely to control:

Adverse selection

Underwriting helps control adverse selection, the tendency of higher-risk applicants to seek coverage.

4. An insurance policy is a conditional contract because:

Benefits are paid only if policy conditions are met

Insurance is conditional: the insurer pays only when the insured satisfies the policy conditions, such as filing proof of loss.

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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 Pennsylvania Insurance Department and the exam administrator before relying on it.