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  4. General Insurance Concepts

Free General Insurance Concepts Practice Questions

West Virginia Life exam — 50 practice questions.

Subtopics: Insurable interest, Utmost good faith, Adhesion, Aleatory, Valued contract, Law of large numbers, Representation, Concealment, Risk management, Hazard, Definition of risk, 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, 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, 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 valid life insurance policy, insurable interest in the insured must generally 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. The principle that both the applicant and insurer must deal honestly and disclose material facts is called:

Utmost good faith

Insurance contracts rest on utmost good faith, requiring honesty and full disclosure by both parties.

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

The insured drafts most of the terms

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

4. Insurance contracts are described as aleatory because:

The values exchanged may be unequal and depend on an uncertain event

An aleatory contract involves an unequal exchange of value contingent on an uncertain future event.

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.