Question

When is it best to insure assets?

a.

When the probability of occurrence (frequency) of a loss is high

b.

When the possible impact (severity) of a loss is low

c.

When both the probability of occurrence is low and the possible impact is high

d.

When there is no possibility of a loss occurring

Posted under IC38 Life Insurance Agent Exam

Answer: (c).When both the probability of occurrence is low and the possible impact is high Explanation:It is best to insure assets when the probability of occurrence (frequency) of a loss is low but the possible impact (severity) is high.

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