Free General Insurance Concepts Practice Questions
Maryland Life, Accident & Health exam — 61 practice questions.
Subtopics: Speculative risk, Physical hazard, Morale hazard, Unilateral contract, Conditional contract, 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, Express authority, Apparent authority, Fiduciary duty, Reinsurance, Reciprocal insurer, Estoppel, Insurable interest timing, Competent parties, Warranties, Material misrepresentation, Waiver, Parol evidence, Implied authority, Law of agency, Pure risk, Risk sharing, Risk reduction, Fraternal benefit society, Insurer financial strength, Producers, Contract characteristics
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Sample questions & answers
1. Which of the following is a speculative risk that is generally not insurable?
Investing in a new business venture
Speculative risk involves a chance of gain or loss (e.g., starting a business) and is not insurable; only pure risk is insurable.
2. A physical hazard is best described as:
A physical condition raising loss chances
A physical hazard is a tangible condition (such as icy steps or a heart condition) that increases the likelihood or severity of a loss.
3. A morale hazard refers to:
Indifference to loss because of insurance
Morale hazard is an attitude of carelessness or indifference toward loss arising from the existence of insurance.
4. Why is an insurance policy called a unilateral contract?
Only the insurer makes a legally enforceable promise
In a unilateral contract only one party (the insurer) makes a legally enforceable promise; the insured is not legally compelled to pay premiums.
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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.
