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.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

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

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. The principle of risk pooling in life insurance primarily serves to:Which document serves as evidence of the life insurance contract and contains all the terms and conditions of the insurance?

View solution

Q. What is one of the disadvantages of cash value life insurance contracts?

View solution

Q. What is one of the advantages of cash value life insurance contracts?

View solution

Q. Why is life insurance often compared to financial products?

View solution

Q. What is the purpose of the life insurance policy document?

View solution

Q. What role does the Principle of Pooling play in life insurance?

View solution

Q. How does the concept of level premiums apply to general insurance policies?

View solution

Q. Why do insurance companies use level premiums for life insurance policies?

View solution

Q. What is the primary difference in risk between general insurance and life insurance?

View solution

Q. Why are level premiums necessary in life insurance?

View solution

Q. How does life insurance differ from general insurance?

View solution

Q. What does HLV stand for in the context of life insurance?

View solution

Q. Why is understanding Human Life Value (HLV) important for a life insurance agent?

View solution

Q. What is the typical recommended range for the amount of life insurance based on one's annual income?

View solution

Q. How is Human Life Value (HLV) calculated using a simple thumb rule?

View solution

Q. What is Human Life Value (HLV) in the context of life insurance?

View solution
View All MCQs on IC38 Life Insurance Agent Exam

Recommended Subjects

Are you eager to expand your knowledge beyond IC38 Life Insurance Agent Exam? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Basic Chemical Engineering

Get a solid foundation in Chemical Engineering with our Basic Chemical Engineering...

Corrosion Engineering

Master the art of preventing material deterioration with our Corrosion Engineering...

DC Machines

Dive into the fundamentals of direct current (DC) machines with our specialized...

International Relations

Navigate the complex world of International Relations with our dedicated category....

Power Plant Engineering

Embark on a journey through the fascinating domain of Power Plant Engineering, where...

Life Sciences

Delve into the diverse world of life sciences with our specialized category. Explore...

UIDAI Aadhaar Supervisor Certification

Prepare for the UIDAI Aadhaar Supervisor Certification with our specialized category....

Automotive Engine Design

Embark on a thrilling exploration of Automotive Engine Design, where the intricacies...

Data Interpretation

Master the art of data analysis and interpretation with our Data Interpretation...