Pension funds resemble insurance companies by:

Question

Quizplus · Accepted Answer

Pension funds, like insurance companies, operate by pooling resources from multiple investors in order to diversify risk. This helps to spread risk across a larger group of people, reducing the potential for any individual member to experience significant losses. While they do not accept deposits like traditional banks, they do require contributions from members in order to build up the fund over time. Additionally, pension funds are designed to provide retirement income to members, which becomes more valuable the longer they live, similar to the way that insurance benefits become more valuable the longer a policyholder lives.

Pension Funds Resemble Insurance Companies By