Understanding Insurance Concepts

What is the primary role of an insurer in an insurance contract?

• To provide loans to the insured

• To invest in the stock market

• To offer a guarantee against certain risks

• To pay premiums to the insured

Why do insurance companies specialize in different types of insurance?

• To develop complex models for profitability

• To avoid paying taxes

• To reduce competition

• To increase their market share

What is reinsurance?

• Insurance for individuals

• Insurance for insurance companies

• A type of life insurance

• A government insurance program

What is the purpose of investigating insurance claims?

• To delay payments

• To reduce paperwork

• To increase premiums

• To prevent fraudulent claims

What can happen if someone is caught committing insurance fraud?

• They are offered a new policy

• They get a reduced premium

• They can go to jail

• They receive a warning