From the standpoint of the person buying insurance,the central purpose of insurance should be:
A) to collect for all accidental losses.
B) to transfer risks of serious losses.
C) to make profit out of uncertain future events.
D) to accumulate savings.
E) to reduce payments for the most frequently occurring losses.

Question

Quizplus · Accepted Answer

The central purpose of insurance for the person buying it is to transfer the risk of serious losses. Insurance provides protection and financial support in the event of unexpected and costly events, allowing the insured to transfer the risk of such events to the insurer in exchange for a premium payment. The aim is to avoid financial hardship in the event of a major loss that the individual may not be able to afford to pay for themselves. The other options listed do not align with the primary purpose of insurance for the customer.

From the Standpoint of the Person Buying Insurance,the Central Purpose