Risk Pooling

question 76

Multiple Choice

Risk pooling:

• A)doesn't reduce the risk of catastrophes happening.
• B)reallocates the costs of catastrophes when they occur.
• C)allows individuals the peace of mind that they will never have to pay the full expense of a catastrophe if it hits them.
• D)All of these statements are true.

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Definitions:

Financial Security

The state of having stable income or other resources to support a standard of living now and in the foreseeable future.

Dependents

Individuals who rely on others, typically family members, for financial support and care due to age, disability, or other reasons.

Life Insurance

A contract between an individual and an insurance company, providing financial compensation to designated beneficiaries upon the policyholder's death.

Annually

Occurring once every year.