What is the main purpose of insurance?

Understand the Problem

The question is asking us to identify the main purpose of insurance from the provided options, focusing on its role in providing compensation for losses.

Answer

To reduce financial uncertainty and manage accidental loss.

The main purpose of insurance is to reduce financial uncertainty and make accidental loss manageable by transferring the risk of a large loss to a professional insurer in exchange for a known fee, such as an insurance premium.

Answer for screen readers

The main purpose of insurance is to reduce financial uncertainty and make accidental loss manageable by transferring the risk of a large loss to a professional insurer in exchange for a known fee, such as an insurance premium.

More Information

Insurance helps individuals and organizations manage risk by compensating for losses due to unforeseen events like accidents or disasters. It's a financial safety net that allows for more predictable management of finances.

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