Insurance Fundamentals: Understanding Perils
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Questions and Answers

What is the primary reason why assets need to be insured?

  • To increase the value of the assets over time
  • To protect against unexpected events that may cause loss or destruction (correct)
  • To guarantee a fixed return on investment
  • To ensure they remain functional throughout their expected lifetime
  • What is the definition of a peril?

  • A type of insurance policy
  • A type of asset that is prone to damage
  • The cause of loss or an event that may cause a loss (correct)
  • The event itself that causes a loss
  • Why is life considered uncertain?

  • Because it is affected by natural disasters
  • Because it is affected by unexpected events (correct)
  • Because it is affected by predictable events
  • Because it is affected by human error
  • What is an example of a peril?

    <p>A natural disaster, such as an earthquake</p> Signup and view all the answers

    What is the outcome of an unexpected event or accidental occurrence?

    <p>Assets are destroyed or made non-functional</p> Signup and view all the answers

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