Free General Insurance Concepts Practice Questions
Illinois Life exam — 76 practice questions.
Subtopics: Law of large numbers, Valued contract, Contract of adhesion, Utmost good faith, Aleatory contract, Definition of risk, Hazard, 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, Concealment, Pure vs speculative risk, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Unilateral contract, Conditional contract, Warranty, Waiver, Estoppel, Reciprocal insurer, Fraternal benefit society, Reinsurance, Surplus lines insurer, Self-insurance, Exposure, Loss, Risk avoidance, Risk reduction, Risk sharing, Speculative risk, Homogeneous exposure units, Catastrophic loss, Domestic insurer, Alien insurer, Mutual dividends, Assessment mutual, Lloyd's, Government insurers, Insurer ratings, Captive agency system, Independent agency, Direct response, Managing general agent, Insurer as principal, Presumption of agency, Errors and omissions, Insurer consideration, Reasonable expectations, Fraud, Personal contract
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Sample questions & answers
1. The law of large numbers means that as the number of similar exposures increases an insurer can:
Predict losses more accurately
The law of large numbers lets insurers predict losses more accurately as the pool of similar exposures grows.
2. A life insurance policy is best described as:
A valued contract paying a stated face amount
Life insurance is a valued contract that pays a stated face amount rather than indemnifying an exact loss.
3. Because the insurer writes the policy and the insured accepts it as written the contract is one of:
Adhesion with ambiguities construed against the insurer
An insurance policy is a contract of adhesion so ambiguities are generally construed against the drafting insurer.
4. The principle of utmost good faith in insurance requires:
Honesty and full disclosure by both parties
Utmost good faith requires both parties to deal honestly and disclose material facts.
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.
