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Questions and Answers
What is the main purpose of insurance pooling?
What is the main purpose of insurance pooling?
- To render services connected with the risk
- To provide financial benefits to the insured
- To indemnify the insured for potential losses (correct)
- To eliminate the possibility of future losses
Which best describes the concept of fortuitous losses?
Which best describes the concept of fortuitous losses?
- Predictable, planned, and intentional
- Controlled, known, and deliberate
- Inevitable, certain, and avoidable
- Unforeseen, unexpected, and occurs as a result of chance (correct)
What is the goal of spreading losses over the entire group in insurance pooling?
What is the goal of spreading losses over the entire group in insurance pooling?
- To maximize the potential for high individual losses
- To substitute average loss for actual loss and reduce variation in possible outcomes (correct)
- To predict exact losses for each individual in the group
- To distribute losses equally among all group members
What is the process of transferring pure risk from the insured to the insurer known as?
What is the process of transferring pure risk from the insured to the insurer known as?
What does underwriting involve in the insurance context?
What does underwriting involve in the insurance context?
What characterizes an ideally insurable risk?
What characterizes an ideally insurable risk?
Which characteristic of insurance ensures that the insurer can accurately predict losses?
Which characteristic of insurance ensures that the insurer can accurately predict losses?
In insurance, what condition indicates that the loss should be unforeseen, unexpected, and outside the control of the insured?
In insurance, what condition indicates that the loss should be unforeseen, unexpected, and outside the control of the insured?
Which characteristic of insurance specifies that the insurer must be able to calculate the average frequency and severity of future losses accurately?
Which characteristic of insurance specifies that the insurer must be able to calculate the average frequency and severity of future losses accurately?
What type of insurance indemnifies owners against loss or damage to property caused by natural perils?
What type of insurance indemnifies owners against loss or damage to property caused by natural perils?
Under government insurance, which type usually requires mandatory contributions from employers, employees, or both?
Under government insurance, which type usually requires mandatory contributions from employers, employees, or both?
What are some of the costs associated with insurance?
What are some of the costs associated with insurance?
Which characteristic of an insurance contract means that it depends upon some contingent event that is uncertain?
Which characteristic of an insurance contract means that it depends upon some contingent event that is uncertain?
What type of insurance covers the insured's legal liability arising out of property damage or bodily injury to others?
What type of insurance covers the insured's legal liability arising out of property damage or bodily injury to others?
Under social insurance, what do recipients derive the right to receive benefits from?
Under social insurance, what do recipients derive the right to receive benefits from?
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