ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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To prevent bad things from ever happening
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To help you get better when you are sick
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To manage risks by sharing them with other members of insurance companies
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To help you refinance your loabs
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Detailed explanation-1: -It is a kind of risk management plan to use an insurance policy as a hedge against an uncertain loss. Insurance coverage does not mitigate the magnitude of loss one may face. It only assures that the loss is shared and distributed among multiple people. Various clients of an insurance company pool in their risks.
Detailed explanation-2: -The primary purpose of insurance is to reduce the risks an insured person faces.
Detailed explanation-3: -By sharing the risk, you, your insurance company, and doctors / hospitals are protected from individually bearing the costs for those who need a lot of health care or have medical emergencies during the year.
Detailed explanation-4: -Risk sharing, also known as “risk distribution, ” means that the premiums and losses of each member of a group of policyholders are allocated within the group based on a predetermined formula.