Gina would like to buy a house.She will pay 10 percent of the cost of the house as a down payment and borrow the other 90 percent from a mortgage lender.The home will serve as collateral for the loan.The lender will not make the loan to Gina unless the home is insured.Using insurance to secure the collateral for a loan illustrates which of the following benefits of insurance to society?

Question

Quizplus · Accepted Answer

A down payment and insurance reduce the risk for the lender, making it more likely that they will approve the loan. This enhancement of credit is a benefit of insurance to society.

Gina Would Like to Buy a House