An insurance policy is
A) The contract that reduces the financial loss associated with some risky event
B) The amount of money a policy holder pays for the insurance policy
C) The amount of money a policy holder receives if a specific loss occurs
D) The probability of loss from a specific event

Question

Quizplus · Accepted Answer

An insurance policy is a contract that reduces the financial loss associated with some risky event. It outlines the terms and conditions of the insurance coverage, including premiums, deductibles, coverage limits, and exclusions. The policy protects the policyholder from financial losses due to unexpected events, such as accidents, illnesses, or natural disasters. It provides peace of mind and helps individuals and businesses manage their risks by transferring them to an insurance company. B, C, and D are not accurate definitions of an insurance policy.

An Insurance Policy Is