IC-38 Corporate Agent SP Practice Questions - IC-38 Corporate Agent Specified Person Exam (IRDAI III) Exam

Which statement best describes risk pooling in insurance?

A few people pay large premiums so one person can avoid all loss Many people contribute small premiums so a common fund can pay the losses of the few who suffer them The government pays all insurance claims from tax revenue Insurers never share risk with reinsurance

Correct Answer:

Many people contribute small premiums so a common fund can pay the losses of the few who suffer them

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