18 Questions
What is the main reason individuals are willing to pay for insurance?
To avoid a risky situation.
How does insurance provide financial stability?
By transferring the risk of financial losses from the insured to the insurer.
Describe a scenario where insurance can prevent financial disaster.
Freddy met with an accident and damaged his car extensively.
How does insurance benefit individuals when unfortunate events occur?
Individuals can get their money back for the losses.
What is one of the key functions of insurance in stimulating business enterprise?
Transferring financial risks from businesses to insurers.
How does insurance contribute to peace of mind for individuals and families?
By protecting their financial stability.
How can insurance help mitigate the financial impact on an individual if an unfortunate event occurs?
Insurance can help mitigate the financial impact by providing indemnity or alleviating hardship on the insured.
Why is insurance considered a positive stimulus for businesses?
Insurance is considered a positive stimulus for businesses as it relieves them from the worry of how to meet the cost of risks.
How does insurance contribute to stimulating business enterprise?
Insurance contributes to stimulating business enterprise by allowing entrepreneurs to transfer some risks to insurers.
What benefits do individuals gain from knowing that insurance exists to meet financial consequences of risks?
Individuals gain peace of mind from knowing that insurance exists to meet financial consequences of risks.
Why are entrepreneurs more willing to invest in business ventures when insurance is available?
Entrepreneurs are more willing to invest as they know they can transfer some risks to insurers and not lose everything.
How does insurance help individuals maintain their present lifestyle and future plans?
Insurance helps individuals maintain their present lifestyle and future plans by providing financial protection.
What are some examples of benefit contracts?
Personal Accident Insurance, Critical Illness Insurance, Hospital Income Insurance, Life Insurance policies (Term, Endowment, Whole Life)
Why are losses like umbrellas and key pouches not normally insured?
Because the financial burden caused by such losses is minimal compared to the cost of administering an insurance program.
Give an example of a loss that could cause significant financial hardship to most people.
A fire gutting a row of residential housing resulting in significant home loss.
What is the fifth requirement for a risk to be insurable?
The insurance must be affordable.
Why is the financial burden caused by certain losses a requirement for insurance?
To ensure that the loss is large enough to warrant financial protection through insurance.
What types of losses are unlikely to be insured?
Losses like umbrellas, key pouches, and sunglasses.
Learn about how insurance can help individuals maintain their current lifestyle and protect their future plans by mitigating financial risks during unexpected events. Explore the role of insurance in providing peace of mind and alleviating hardships for the insured.
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