Free General Insurance Concepts Practice Questions
Alabama Accident & Health exam — 70 practice questions.
Subtopics: Risk, Hazard, Adverse selection control, Moral hazard, Reciprocity of utmost good faith, Risk definition, Morale hazard, Peril, Risk transfer, Adverse selection, 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, Pure risk, Speculative risk, Law of large numbers, Physical hazard, Implied authority, Fiduciary duty, Warranty, Misrepresentation, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Non-admitted insurer, Alien insurer, Unilateral contract, Conditional contract, Offer and acceptance, Insurable interest, Methods of handling risk, Insurable risk, Types of insurers, Insurer financial strength, Distribution systems, Agency law, Contract characteristics, Contract interpretation, Contract elements, Fraud
Read the General Insurance Concepts study guide
Sample questions & answers
1. In insurance, 'risk' is best defined as:
The uncertainty or chance of loss
Risk is the uncertainty regarding loss; insurance transfers the financial consequences of that uncertainty.
2. A condition that increases the likelihood or severity of a loss is a:
Hazard
A hazard is a condition that increases the chance or size of a loss, while a peril is the cause of loss.
3. Insurers control adverse selection in health insurance primarily through:
Underwriting and policy provisions
Underwriting and provisions such as pre-existing condition limits help control adverse selection.
4. A moral hazard in health insurance refers to:
The chance a person acts carelessly or dishonestly because they are insured
Moral hazard is the increased likelihood of loss arising from a person's dishonesty or carelessness because coverage exists.
Practice: General Insurance Concepts
Answer choices are shuffled every time, and every question comes with an explanation.
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.
