Business

What is reinsurance? What will be an ideal response?

QUESTION What is reinsurance? What will be an ideal response?   ANSWER Answer: Reinsurance is when a general insurer shares the risks and premiums associated with a specific policy with another company, the reinsurer. Explanation: Insurers can’t survive unless they spread their risks over many policyholders.

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Date: September 3rd, 2020

Which of the following is NOT a benefit provided by workers’ compensat

QUESTION Which of the following is NOT a benefit provided by workers’ compensation insurance? A) medical care B) benefits to survivors of workers who die of work-related injuries C) rehabilitation services D) financial benefits E) unemployment benefits   ANSWER Answer: E Explanation: E) Workers’ compensation insurance provides financial benefits as well as coverage of medical […]

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Date: September 3rd, 2020

Does health insurance involve pure risk or speculative risk for the in

QUESTION Does health insurance involve pure risk or speculative risk for the insured? Explain. What will be an ideal response?   ANSWER Answer: Health insurance involves pure risk for the insured. Pure risk involves a chance for either loss or no loss; there is no possibility of gain. The insured pay their premiums whether they […]

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Date: September 3rd, 2020

Which of the following is an example of risk avoidance? A) serving on

QUESTION Which of the following is an example of risk avoidance? A) serving only nonalcoholic beverages at a company party B) prohibiting smoking on company property C) requiring regular physical examinations D) providing mandatory safety training E) installing workout rooms   ANSWER Answer: A Explanation: A) An example of not participating in risky activity is […]

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Date: September 3rd, 2020

Which of the following is an example of automobile crash protection?

QUESTION Which of the following is an example of automobile crash protection? A) thermal imaging cameras that enhance drivers’ ability to distinguish objects at night B) cruise controls with a radar sensor that adjusts the distance between you and the car in front of you C) lane departure warning systems such as rumble strip sounds […]

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Date: September 3rd, 2020

Which of the following is an example of “going bare”? A) Enrique owns

QUESTION Which of the following is an example of “going bare”? A) Enrique owns a small recording studio. Despite its size, the studio contains thousands of dollars’ worth of equipment. Enrique has chosen to transfer his risk. B) Hetty owns a small nail salon and the building it is in. Because she perceives the risks […]

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Date: September 3rd, 2020

Which situation is NOT insurable? A) Rita wants to be sure to insure

QUESTION Which situation is NOT insurable? A) Rita wants to be sure to insure her new riverside cottage from flood damage. B) Trevor wants to purchase hurricane insurance to cover the spectacular ocean view he has from his new home. C) Chad wants to be sure his cattle barns in Kansas are covered in the […]

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Date: September 3rd, 2020

Which situation is insurable? A) Eileen wants to insure her sister’s

QUESTION Which situation is insurable? A) Eileen wants to insure her sister’s house against termite damage. B) Billy wants to help his father by holding the workers’ accident insurance for his father’s steel working company. C) Robert wants to take out a policy to protect his nephew’s store from theft. D) Maxine wants to insure […]

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Date: September 3rd, 2020