Free General Insurance Concepts Practice Questions
Wyoming Life exam — 80 practice questions.
Subtopics: Risk management, Insurable interest, Adverse selection, Law of large numbers, Hazard, Indemnity, Aleatory contract, Warranty versus representation, Utmost good faith, Definition of risk, 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, Representations, Concealment, Pure vs speculative risk, Moral hazard, Morale hazard, Physical hazard, Implied authority, Fiduciary duty, 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. A person who buys life insurance to handle the financial risk of premature death is using the risk management technique of:
Transfer
Purchasing insurance transfers the financial consequences of a risk from the individual to the insurer.
2. For life insurance, insurable interest in the proposed insured must generally exist:
At the time of policy application
Wyoming requires that a person procuring insurance on another's life have an insurable interest at the time the contract is made; it need not exist when the claim is paid.
3. In insurance, the term adverse selection describes the tendency of:
Those with a greater likelihood of loss to seek insurance more than others
Adverse selection is the tendency for higher-risk individuals to seek or retain insurance more than lower-risk individuals.
4. Insurers rely on the law of large numbers to:
Predict losses more accurately as the number of similar exposures increases
The law of large numbers lets insurers predict aggregate losses more reliably as the number of similar insured exposures grows.
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.
