Free General Insurance Concepts Practice Questions
Michigan Life, Accident & Health exam (series 16-80) — 62 practice questions.
Subtopics: Contract of adhesion, Aleatory, Utmost good faith, Consideration, Conditional receipt, Waiver and estoppel, Handling risk, Insurable risk, Hazards, Definitions, Insurer classifications, Adverse selection, Elements of a contract, Legal interpretations, Law of large numbers, Indemnity, Aleatory contract, Unilateral contract, Conditional 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. An insurance policy is a contract of adhesion because:
The insurer drafts it; the buyer accepts it
A contract of adhesion is drafted by the insurer and accepted by the applicant as written.
2. Why is an insurance contract considered aleatory?
The amounts exchanged may be unequal
An aleatory contract involves potentially unequal exchanges based on an uncertain event.
3. The reliance on honesty and full disclosure by both parties is the principle of:
Utmost good faith
Insurance contracts rest on utmost good faith, requiring honesty and disclosure.
4. The insured's consideration in the contract is:
Premium and application statements
The insured's consideration is the premium payment plus the statements made in the application.
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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.
