Question

what is the primary purpose of insurance?
to make a profit for policyowners
to eliminate all risk
to transfer risk from an individual to an insurer
to guarantee financial gain
which type of risk is classified as insurable *
speculative
pure
exposure
insurability
risk in insurance terminology refers to *
the uncertainty of a loss
the cause of a peril
the certainty of a loss

Explanation:

1. For the first question: Insurance does not make profit for policyowners, cannot eliminate all risk, nor guarantee financial gain. Its core function is shifting risk from the insured to the insurer.
2. For the second question: Pure risks (only possibility of loss or no loss) are insurable, while speculative risks (potential for gain or loss) are not. Exposure is a risk source, and insurability is a concept, not a risk type.
3. For the third question: In insurance, risk is defined as the uncertainty of whether a loss will occur, not the cause of loss (peril) or a guaranteed loss.

Answer:

1. to transfer risk from an individual to an insurer
2. pure
3. The uncertainty of a loss