Which of the following is not a of insurance?Risk sharingAssist in capital formationLending of fundsNone of the above (2024)

FAQs

Which of the following is not a of insurance?Risk sharingAssist in capital formationLending of fundsNone of the above? ›

Insurance is a means of protection from financial loss. It is a form of risk management primarily hedged against any uncertain future loss. The functions of insurance are risk sharing, assisting in capital formation, economic progress, etc. Lending of funds is not a function of insurance.

Expert-Verified Answer

Lending funds is not a function of insurance. Among the given options option (c) lending funds is the correct answer. Explanation: The main functions of insurance are : Protection, Risk sharing , Asset in capital formation, Providing certainty.

Key Takeaways

An uninsurable risk could include a situation in which insurance is against the law, such as coverage for criminal penalties. An uninsurable risk can be an event that's too likely to occur, such as a hurricane or flood, in an area where those disasters are frequent.

4) The insurance premium paid, are invested by the insurer in various income generating assets which assists in capital formation.

Final answer: Insurance offers many benefits, including risk diversification, peace of mind, and security for the future. However, the high cost of insurance premiums, complicated policies, and possibility of claims denial can be considered negatives, rather than benefits.

From the given alternatives term isurance is not a type of life insurance product.

The contract of indemnity is defined as, " A contract where one party promises to save the other from the loss caused by the conduct of the promisor himself or by the conduct of any other party." In a life insurance contract, nobody can save the life of the person. Hence, contract of indemnity does not apply here.

In so doing, any peril not named in the exclusions list is automatically covered. The most common types of perils excluded from "all risks" include earthquake, war, government seizure or destruction, wear and tear, infestation, pollution, nuclear hazard, and market loss.

A risk that an insurer will not take on. For example, this may be where an event is inevitable (such as a terminally-ill person's death), gradual (such as rust or corrosion) or against the law.

Speculative risk has a chance of loss, profit, or a possibility that nothing happens. Gambling and investments are the most typical examples of speculative risk. The traditional insurance market does not consider speculative risks to be insurable.

Is risk sharing a function of insurance? ›

Risk sharing, a fundamental concept in insurance and risk management, refers to the practice of distributing or transferring the financial impact of potential losses among various parties.

Capital is the most important factor of production particularly in a developing economy. Capital Formation is defined as that part of country's current output and imports which is not consumed or exported during the accounting period, but is set aside as an addition to its stock of capital goods.

Thus, for capital formation, both savings and investments are necessary.

Term life insurance. Whole life insurance (permanent) Universal life insurance (permanent)

Assignment of Benefits (AOB) is an agreement that transfers the insurance claims rights or benefits of the policy to a third party. An AOB gives the third party authority to file a claim, make repair decisions, and collect insurance payments without the involvement of the homeowner.

Risk Avoidance–eliminate the exposure completely. Risk Control–reduce chance or size of loss, or make the likelihood more certain. Risk Transfer–via insurance or contractual language. Risk Retention–decide to bear the risk at an acceptable level.

Risk sharing, a fundamental concept in insurance and risk management, refers to the practice of distributing or transferring the financial impact of potential losses among various parties.

Risk management is crucial to avoid losses in life. Managing the risks associated with an individual's life is even more important, as no one wants their family to suffer in their absence. Future Generali India Life Insurance offers several plans to suit an investor's financial needs.

Protection is a function of insurance. Is to provide protection from probable chances of loss. Insurance cannot stop the happening of risk or any unforeseen event but can compensate for losses arising out of it.