Why Is a Large Number of Exposure Units Generally Required

question 17

Multiple Choice

Why is a large number of exposure units generally required before a pure risk is insurable?

• A)It prevents the insurer from losing money.
• B)It eliminates intentional losses.
• C)It minimizes moral hazard.
• D)It enables the insurer to predict losses more accurately.

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Definitions:

Apathy

A state of indifference, where an individual shows little or no emotion, interest, or concern towards emotional, social, or physical life.

Euphoria

A feeling of intense happiness and excitement, often more than what is considered normal under the circumstances.

Senile Dementia

A decline in cognitive function due to the aging process, often characterized by memory loss and impaired reasoning.

Excludes 1 Notation

A term used in medical coding (e.g., ICD-10) indicating a condition that cannot be coded together with the code it is listed with.