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Free General Insurance Concepts Practice Questions

Wyoming Life exam — 49 practice questions.

Subtopics: Risk management, Insurable interest, Adverse selection, Law of large numbers, Hazard, Indemnity, Aleatory contract, Warranty versus representation, Utmost good faith, 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, Representations, Concealment, Pure vs speculative risk, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, 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. A person who buys life insurance to handle the financial risk of premature death is using the risk management technique of:

Transfer

Purchasing insurance transfers the financial consequences of a risk from the individual to the insurer.

2. For life insurance, insurable interest in the proposed insured must generally exist:

At the time of policy application

For life insurance, insurable interest must exist at the inception of the policy, when the application is made.

3. Adverse selection refers to the tendency of:

Those with a greater likelihood of loss to seek insurance more than others

Adverse selection is the tendency for higher-risk individuals to seek or retain insurance more than lower-risk individuals.

4. Insurers rely on the law of large numbers to:

Predict losses more accurately as the number of similar exposures increases

The law of large numbers lets insurers predict aggregate losses more reliably as the number of similar insured exposures grows.

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.