General Insurance
Which method of handling risk does buying life insurance represent?
Answer and explanation
Answer: A. Buying insurance transfers the financial consequence of a loss to the insurer under a contract. Reduction lessens loss severity, avoidance means not taking on the exposure, and sharing spreads the loss among a group without a contract of insurance.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, transfer by insurance contract
More general insurance questions
- What must be shown to establish fraud, beyond an untrue statement of material fact?
- What ordinarily distinguishes a government insurer from a private one?
- What problem does the term adverse selection describe?
- When a policyowner stops paying premiums, allowing a term life policy to lapse, the insurer cannot take legal action to force the owner to continue making payments. Which characteristic of insurance contracts does this limitation reflect?
- Which characteristic must a loss have to be an insurable risk?
- Which characteristic would ordinarily prevent a risk from being insurable?
621 New York questions like this one.
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