Life Ch. 2 Nature of Insurance

Insurance addresses what type of risk? Pure Speculative None of these All risks are insurable

The probability of loss becoming more predictable is attributed to Law of Large Numbers speculative risk insurable interest Law of Frequent Risks

Which of the following is a requirement for a risk to be considered insurable? Catastrophic Speculative Chance of both a loss and gain Predictability of loss

How can an insurance company minimize exposure to loss? Risk Avoidance Reinsurance Reissuance Risk Assumption

What type of risk involves the potential for loss with no possibility for gain? Speculative Pure Adversev cAdverse

An insurable risk requires that the chance for both a loss or gain exists the loss must be catastrophic that the chance of loss be measurable that the loss must be incalculable

For insurance purposes, similar objects which are exposed to the same perils are referred to as Homogenous perils Similar exposure units Homogeneous exposure units Common hazards