Risk Retention Is Not Appropriate When

question 34

Multiple Choice

Risk retention is not appropriate when

• A)the worst possible loss is small.
• B)the losses are highly predicable in both frequency and severity.
• C)the retention is due to inaction.
• D)(all of these)

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Definitions:

Employer-Paid Premiums

Premiums paid by employers for employee benefits like health insurance, usually not taxable income for the employee.

Life Insurance

Life Insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.

Taxable

Referring to income or transactions that are subject to taxation by government authorities.

Social Security Benefits

Payments made to qualified individuals from the Social Security Administration, typically for retirement, disability, or survivorship.