Free General Insurance Concepts Practice Questions
Missouri Life exam — 78 practice questions.
Subtopics: Law of large numbers, Insurable risk, Adhesion, Aleatory, Utmost good faith, Apparent authority, Material fact, Definition of risk, Hazard, Peril, Handling risk, Retention, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Consideration, Legal purpose, Competent parties, Offer and acceptance, Express authority, Indemnity, Representations, Concealment, Pure vs speculative risk, Adverse selection, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, Aleatory contract, Contract of adhesion, 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, Valued contract
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Sample questions & answers
1. The principle that predicting losses becomes more accurate as the number of similar exposures increases is the:
Law of large numbers
The law of large numbers states that as the number of similar independent exposures grows, actual results approach expected results.
2. Which type of risk is generally insurable?
Pure risk
Only pure risk, involving the chance of loss or no loss with no chance of gain, is generally insurable.
3. An insurance contract written by the insurer and accepted as written by the insured is a contract of:
Adhesion
Insurance contracts are contracts of adhesion because the insurer drafts the terms and the other party accepts or rejects them.
4. A contract in which the dollar amounts exchanged may be unequal is described as:
Aleatory
Insurance is aleatory because the values exchanged by the parties may be unequal depending on whether a loss occurs.
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.
