MANAGEMENT

Detailed explanation-1: -The amount of money payable to a policyholder upon discontinuation of a life insurance policy is called the face amount. Essentially, insurance is a way to enrich policyholders. Insurers cannot predict which specific individuals will suffer losses. Risk transfer is the process of accepting the consequences of risk.

Detailed explanation-2: -Most pure risks can be divided into three categories: personal risks that affect the income-earning power of the insured person, property risks, and liability risks that cover losses resulting from social interactions.

Detailed explanation-3: -Sports betting, investing in stocks, and buying junk bonds are some examples of activities that involve speculative risk.

Detailed explanation-4: -An uninsurable risk could include a situation in which insurance is against the law, such as coverage for criminal penalties. An uninsurable risk can be an event that’s too likely to occur, such as a hurricane or flood, in an area where those disasters are frequent.

Detailed explanation-5: -Speculative risk is a category of risk that can be taken on voluntarily and will either result in a profit or loss. All speculative risks are undertaken as a result of a conscious choice.