Free General Insurance Concepts Practice Questions
Massachusetts Life, Accident & Health exam — 61 practice questions.
Subtopics: Adhesion, Aleatory, Consideration, Subrogation, Estoppel, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Contract of adhesion, Utmost good faith, Unilateral contract, Conditional contract, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Insurable interest timing, Competent parties, Warranties, Material misrepresentation, Waiver, Parol evidence, Implied authority, Law of agency, Pure risk, Speculative risk, Risk sharing, Risk reduction, Fraternal benefit society, Insurer financial strength, Producers, Contract characteristics
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Sample questions & answers
1. An insurance policy is called a contract of adhesion because:
One party writes it and the other accepts or rejects it as written
A contract of adhesion is drafted by one party and offered to the other on a take-it-or-leave-it basis.
2. Insurance is called an aleatory contract because:
The values exchanged may be unequal depending on chance
Aleatory contracts involve an exchange of potentially unequal amounts that depends on an uncertain event.
3. The premium paid by the insured and the insurer's promise to pay covered losses together represent the contract's:
Consideration
Consideration is the value each party gives: the insured's premium and the insurer's promise to pay covered claims.
4. After paying a covered loss, an insurer's right to pursue a responsible third party is:
Subrogation
Subrogation lets the insurer recover a paid loss from the third party who was legally responsible for it.
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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.
