Insurance Concepts

What is a risk?

• Possibility of Financial Loss.

• Event that causes a loss to an asset.

Which of the following are the perils in Life Insurance?

• Death

• Sickness

• Accident

• Fire

Sitaram loves to go on long drives in his car. One day, he was late to a wedding function. In the rush to reach the wedding destination, he decided to drive at high speed but met with an accident. Which of the following is a hazard?

• Drivng the car

• Meeting with an accident

• Driving at a high speed

Deepak invested in stock market. It is a ..............................risk.

• pure

• speculative

Insurance does not cover speculative risks. Identify if the statement is true or false.

• True

• False

Having fire extinguishers and water sprinklers installed and maintained in a factory is an example of which risk management strategy?

• Risk Control

• Risk Avoidance

• Risk Transfer

Which of the following is an example of risk avoidance?

• Wearing a helmet while riding a bike

• Not purchasing a bike

• Riding the bike within specified speed limits

Buying a life insurance policy is an example of risk.........................

• avoidance

• retention

• transfer

Minal purchased a car. As the years pass, the value of the car will depreciate, thus making it a pure risk. Is this risk insurable?

• No

• Yes

Emotional loss due to the death of a person can be insured. Indentify if the statement is true or false.

• True

• False