Which of the following is not a Function of Insurance (2024)

FAQs

Which of the following is not a Function of Insurance? ›

Lending of funds is not a function of insurance.

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.

Universal: Universal is not a characteristic of insurance contracts. Insurance contracts are not universally applicable; they are specific agreements between an insurer and a policyholder. Universal might be associated with other financial or legal concepts, but it does not describe insurance contracts.

There are several functions of insurance in the everyday life of both an individual as well as a business. It provides a safety net against the uncertainties of life and helps to minimise the loss for the insured, and give them some sort of comfort in the face of a loss or tragedy.

Final answer: The number of beneficiaries is not a component of an insurance policy premium. The components typically include the mortality cost, insurer expenses, and potential investment return by the insurance company.

The functions of insurance are risk sharing, assisting in capital formation, economic progress, etc. Lending of funds is not a function of insurance.

The primary function of insurance is to maintain your existing level of wealth by protecting you against potential financial losses or liability as a result of unexpected events.

The key functions of insurance are providing certainty of compensation for losses, distributing risk across a large number of policyholders, and providing security for insured individuals and their property.

Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury.

Insurance is defined both functionally and contractually. Functionally, it is a cooperative device to spread risk over multiple individuals exposed to the same risk. Contractually, it is an agreement where an insurer takes on the risk of a large loss in exchange for regular premium payments.

Which of the following is not a true of insurance? ›

Explanation: The statement that is not true about insurance is that, 'It eliminates risk'. Insurance, in actuality, does not eliminate risk entirely.

An insurance contract typically consists of four elements: offer, acceptance, consideration, and legal purpose. Negotiating is not one of these elements as it refers to the process of reaching an agreement between the parties involved in a contract, rather than being an inherent element of the contract itself.

Solution(By Examveda Team) Maximization of Profit is not the principle of insurance. There are seven basic principles that create an insurance contract between the insured and the insurer: Utmost Good Faith, Insurable Interest, Proximate Cause, Indemnity, Subrogation, Contribution and Loss Minimization.

The function of insurance is to safeguard against financial loss by having the losses of few paid by the contributions of many who are exposed to the same risk.

Insurance companies are generally organized in five broad departments: claims, finance, legal, marketing and underwriting.

Health insurance: How it protects you from health and financial risks. No one plans to get sick or hurt, but most people need medical care at some point. Health insurance covers these costs and offers many other important benefits. Health insurance protects you from unexpected, high medical costs.