Free General Insurance Concepts Practice Questions
Maine Life, Accident & Health exam (series 12-ME-01) — 61 practice questions.
Subtopics: Moral hazard, Morale hazard, Conditional contract, Risk retention, Insurable risk, Handling 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, 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, Speculative risk, Risk sharing, Risk reduction, Fraternal benefit society, Insurer financial strength, Producers, Contract characteristics
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Sample questions & answers
1. A moral hazard is best described as:
A tendency toward dishonesty that increases the likelihood of loss
A moral hazard arises from dishonesty or bad character that increases the chance or size of a loss.
2. A morale hazard refers to:
An attitude of carelessness or indifference because insurance exists
A morale hazard is an indifferent or careless attitude toward loss that arises because coverage is in place.
3. An insurance policy is a conditional contract because:
Certain conditions must be met before the insurer pays a claim
An insurance contract is conditional because both parties must satisfy specified conditions for benefits to be paid.
4. Choosing to self-insure or to accept a policy deductible is an example of risk:
Retention
Retaining part of a risk through self-insurance or a deductible is the risk management technique of retention.
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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.
