Free General Insurance Concepts Practice Questions
Virginia Life exam (series 11-05) — 78 practice questions.
Subtopics: Insurable interest, Utmost good faith, Adhesion, Aleatory, Representations, Concealment, Warranty, 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, 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, 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 a life insurance application the insurable interest must generally exist:
At the time the contract is made
Virginia requires that a person procuring insurance on another have an insurable interest at the time when the contract was made; it need not continue to the date of death.
2. The principle that both parties to an insurance contract rely on each other's honesty is:
Utmost good faith
Insurance contracts are contracts of utmost good faith: each party relies on the other's honesty and full disclosure of material facts.
3. Why is a life policy called a contract of adhesion?
The insurer drafts it and the applicant takes it or leaves it
In a contract of adhesion one party (the insurer) prepares the terms and the other accepts or rejects them as written, so ambiguities are construed against the insurer.
4. Calling an insurance contract aleatory means:
Values exchanged may be unequal and depend on chance
An aleatory contract involves an exchange of unequal values that depends on an uncertain future event.
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.
