Free General Insurance Concepts Practice Questions
Texas Life Agent exam (series InsTX-Life01) — 71 practice questions.
Subtopics: Definition of risk, Hazard, Peril, Handling risk, Retention, Insurable risk, Stock insurer, Mutual insurer, Admitted insurer, Domestic foreign alien, Consideration, Legal purpose, Competent parties, Offer and acceptance, Express authority, Apparent authority, Indemnity, Utmost good faith, Representations, Concealment, Pure vs speculative risk, Law of large numbers, 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
Read the General Insurance Concepts study guide
Sample questions & answers
1. In insurance, 'risk' is best defined as:
Uncertainty regarding loss
Risk is uncertainty about whether a loss will occur; insurance addresses pure risk, the chance of loss or no loss.
2. A condition that increases the likelihood or severity of a loss is a:
Hazard
A hazard increases the chance or size of a loss; a peril is the actual cause of loss.
3. The actual cause of a loss, such as fire or premature death, is a:
Peril
A peril is the direct cause of loss; life insurance insures against the peril of death.
4. Transferring the financial consequences of a risk to an insurer is an example of risk:
Transfer
Buying insurance transfers the financial risk of loss to the insurer in exchange for premium.
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.
