Assignment 5 - Benefits of Insurance

अब Quizwiz के साथ अपने होमवर्क और परीक्षाओं को एस करें!

Which one of the following statements is correct regarding the benefits provided by insurance? Select one: A. Insurance helps reduce the financial burden to society by compensating accident victims. B. The reduction in losses paid by insurers due to risk control measures benefits individual insureds but not society as a whole. C. The primary role of insurance is to meet mandatory insurance requirements. D. Insurance reduces the financial consequences of loss exposures but not the related uncertainty.

A. Insurance helps reduce the financial burden to society by compensating accident victims.

As a single mother on a very tight budget, Ciara is tempted to skimp on her insurance. However, her friend Mehmet tells her not to skimp on insurance, because it will help manage her cash flows. Which one of the following examples best illustrates Mehmet's point? Select one: A. When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it. B. When her car's transmission goes out a month after the warranty expires, Ciara is faced with a $1,100 repair bill. C. Ciara finds it difficult to come up with a $787 auto insurance premium every six months. D. Ciara needs her car to get to her job, and she needs her job to make car payments and pay for her car insurance.

A. When her car's windshield breaks, Ciara has to pay only $100 of the $600 cost of replacing it.

The primary role of insurance is to Select one: A. Eliminate risk for insureds and society. B. Indemnify individuals and organizations for covered losses. C. Make a profit for the insurance company's shareholders. D. Meet an insured's risk management requirements.

B. Indemnify individuals and organizations for covered losses.

The primary role of insurance is to Select one: A. Sell insurance policies to individuals and organizations. B. Indemnify individuals and organizations for covered losses. C. Educate individuals and organizations about loss prevention. D. Make a profit for the insurance company's shareholders.

B. Indemnify individuals and organizations for covered losses.

Which one of the following statements is correct? Select one: A. Insurers are prohibited from investing in social projects. B. Insurers' investment income helps keep premiums at a reasonable level. C. Insurers cannot invest premium income because it must be available to pay claims. D. Insurance provides a source of investment funds for insurers but not for policyholders.

B. Insurers' investment income helps keep premiums at a reasonable level.

Pravalt Construction Company pays less than its competitors for workers compensation insurance because Pravalt has had substantially fewer employee injuries than other firms in its class. This illustrates which one of the following benefits of insurance? Select one: A. Reduce social burden B. Enable efficient use of resources C. Promote risk control D. Meet legal requirements

C. Promote risk control

Which one of the following statements is correct? Select one: A. Insurers generally do not provide incentives to organizations to implement risk control measures. B. One disadvantage of insurance is that it promotes inefficient use of policyholders' funds. C. Insurance policies typically cannot be used to provide evidence of financial resources. D. Contractors must usually provide evidence of liability insurance before a construction contract is granted.

D. Contractors must usually provide evidence of liability insurance before a construction contract is granted.


संबंधित स्टडी सेट्स

COC 2020 - FINAL EXAM STUDY QUESTIONS (SET 3)

View Set

Chapters 2, 3, and 4 Intro to Business and Marketing

View Set

Mrs. "I married a white guy" Scott Lesson 6 (simplified)

View Set