What is the purpose of insurance?
Insurance helps protect individuals from financial losses by providing compensation in case of specific risks or events.
What is a deductible in an insurance policy?
A deductible is the amount the insured must pay out-of-pocket before the insurance company starts covering expenses.
Why is risk management important in insurance?
Risk management helps identify potential risks and mitigate them, allowing insurance companies to remain financially stable and provide coverage to their clients.
What type of insurance is primarily used to protect an individual's income?
Disability insurance is designed to provide income replacement in case an individual is unable to work due to illness or injury.
What is the principle of indemnity in insurance?
Indemnity is the principle that insurance should restore the insured to the same financial position they were in before the loss, without allowing them to profit from the claim.
How does life insurance benefit families?
Life insurance provides financial protection to dependents in the event of the policyholder's death, helping cover living expenses and debts.
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What is the benefit of having comprehensive car insurance?
Comprehensive car insurance covers damage to the vehicle caused by incidents such as theft, vandalism, and natural disasters, in addition to accidents.
What is risk pooling in insurance?
Risk pooling is the practice of gathering many individuals' premiums to cover the potential losses of a few, helping to spread out the financial risk.
Why is risk assessment important in the insurance industry?
Risk assessment helps insurance companies determine the appropriate premiums to charge and ensure they have enough funds to cover potential claims.