ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the risk
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the law
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its what everybody does
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None of the above
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Detailed explanation-1: -Answer and Explanation: The correct option is a) because they are risk-averse. Explanation; Risk aversion is the action of people, who aim to minimize their ambiguity if subjected to threat.
Detailed explanation-2: -Importance of Insurance Buying insurance is important as it ensures that you are financially secure to face any type of problem in life, and this is why insurance is a very important part of financial planning. A general insurance company offers insurance policies to secure health, travel, motor vehicle, and home.
Detailed explanation-3: -Insurance policy As outlined above, purchasing insurance is a common method of transferring risk. When an individual or entity is purchasing insurance, they are shifting financial risks to the insurance company. Insurance companies typically charge a fee – an insurance premium – for accepting such risks.
Detailed explanation-4: -In summary, an insurance contract covers a policyholder for economic loss caused by a peril named in the policy. The policyholder pays a known premium to have the insurer guarantee payment for the unknown loss. In this manner, the policyholder transfers the economic risk to the insurance company.