Exclusions Are Used in Insurance Policies for All of the Following

question 43

Multiple Choice

Exclusions are used in insurance policies for all of the following reasons EXCEPT

• A)to reduce moral hazard.
• B)to waive policy conditions.
• C)to eliminate coverage for uninsurable perils.
• D)to eliminate coverage not needed by typical insureds.

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Definitions:

Target Cost

The maximum amount that can be spent on a product while still earning the required profit margin, based on market-driven pricing.

Desired Return

The target profit or return on investment that a company or investor aims to achieve.

Investment

Allocation of resources, typically money, in order to generate income or profit over time.

Selling Price

The amount of money a buyer pays to purchase a product or service from a seller.