Question

The principle of risk pooling in life insurance primarily serves to:

a.

Generate profits for insurance companies

b.

Create a fund to pool contributions of policyholders

c.

Provide tax advantages to policyholders

d.

Guarantee fixed returns on life insurance policies

Posted under IC38 Life Insurance Agent Exam

Answer: (b).Create a fund to pool contributions of policyholders Explanation:The principle of risk pooling in life insurance creates a fund by pooling the contributions of policyholders, which provides protection against economic loss resulting from untimely deaths.

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Q. The principle of risk pooling in life insurance primarily serves to:
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