Which of the following is an accurate definition of "insurance"?
A) A savings account designed to protect you in the event of a rainy day
B) A financial arrangement that redistributes the costs of unexpected losses among a pool of insureds
C) A communist plot to destroy capitalist enterprise
D) A contractual agreement in which the insurer agrees to pay the insured only if the insured requests the money

Question

Quizplus · Accepted Answer

Insurance is a financial arrangement that redistributes the costs of unexpected losses among a pool of insureds. Insurers collect premiums from policyholders and use the funds to pay for losses that a policyholder experiences. By pooling resources, insurance helps to reduce the impact of financial loss on an individual or business.

Which of the Following Is an Accurate Definition of "Insurance