Which One of the Following Explains the Effect of a Co-Insurance

question 112

Multiple Choice

Which one of the following explains the effect of a co-insurance clause?

• A)A co-insurance clause provides for the insurance claim to be split between two or more beneficiaries.
• B)A co-insurance clause provides for several different properties to be insured under the same policy.
• C)A co-insurance clause provides for the insurance company to only pay a percentage of any loss.
• D)A co-insurance clause provides for more than one person to pay the premium.
• E)A co-insurance clause provides for the insurance company to arrange its own insurance on a large policy.

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Definitions:

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional shares.

Treasury Stock

Shares of a company's own stock that it has repurchased from shareholders and can hold, reissue, or retire.

Common Stock

Represents ownership shares in a corporation, giving shareholders voting rights and a residue claim on corporate earnings in the form of dividends.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to investors, which are reinvested in the business.