Question

In the case of death and disability, how does the mechanism of pooling risks work?

a.

By transferring ownership of the individual

b.

By using a common fund

c.

By increasing the value of the assets

d.

By selling the assets

Posted under IC38 Life Insurance Agent Exam

Answer: (b).By using a common fund Explanation:In the case of death and disability, the mechanism of pooling risks works through a common fund.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. In the case of death and disability, how does the mechanism of pooling risks work?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is the primary role of an insurer in the insurance process?

View solution

Q. What is the fundamental requirement for insurance to take place?

View solution

Q. What is a "peril" in the context of insurance?

View solution

Q. What is the primary purpose of pooling in insurance?

View solution

Q. What role does the insurer play in the insurance process?

View solution

Q. How does insurance reduce the "burden of risk"?

View solution

Q. What is the primary burden of risk in insurance?

View solution

Q. What is an example of the primary burden of risk?

View solution

Q. What is the secondary burden of risk in insurance?

View solution

Q. What is one of the physical and mental strains caused by the secondary burden of risk?

View solution

Q. Why is transferring the risk to an insurer important in managing the secondary burden of risk?

View solution

Q. Which among the following is a secondary burden of risk?

View solution

Q. What is the principle that underlies insurance contracts?

View solution

Q. How do insurance companies reduce risk in financial markets?

View solution

Q. In the context of risk reduction, what does "Diversification" involve?

View solution

Q. How do funds flow in the principle of mutuality?

View solution

Q. What creates a potential corpus of money in insurance contracts?

View solution

Q. What makes insurance unique among financial products?

View solution

Q. What is "risk avoidance" in the context of risk management?

View solution

Q. What is "self-insurance" in risk management?

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!

Concrete Technology

Welcome to Concrete Technology, a category that unravels the secrets behind the...

IC 89 Management Accounting

Boost your preparation for the IC 89 Management Accounting exam with our extensive...

Corrosion Engineering

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

Environment Management

Master the art of Environment Management with our specialized category. Explore...

Sociology

Gain insights into human behavior and society with our Sociology category. Explore...

Mass Transfer

Delve into the science of Mass Transfer with our specialized category. Explore...

Microbiology

Uncover the fascinating world of microbes with our Microbiology category. Delve into...

Environmental Engineering

Explore the critical field of Environmental Engineering with our dedicated category....

Molecular Biology

Dive into the intricate world of molecular biology with our specialized category....