What is the basis for the concept of risk pooling?
The basis for the concept of risk pooling is to share or reduce risks that no single member could absorb on their own. Hence, risk pooling reduces a person or fim's exposure to financial loss by spreading the risk among many members or companies. Actuarial concepts used in risk pooling include:
A. statistical variation.B. the law of averages.C. the law of large numbers.D. the laws of probability.
Answer: Law of large numbers
The basic concept of risk pooling is to ascertain the mortality rate,financial background, literary parameter of the insured while issuing life policy to a person.
pooling of risk
terms period
Life insurance is not based on risk pooling.
what is pooling of risks? This is when a premium is payed by a number of people facing a similar risk into a pool of compensation in the case of any unknown expense. eg repair of a damaged store or even replacement.
what is pooling of risks? This is when a premium is payed by a number of people facing a similar risk into a pool of compensation in the case of any unknown expense. eg repair of a damaged store or even replacement.
There are, in fact, a wide variety of "basic" principles of life insurance. Some of these principles include risk management, risk pooling, and human life value.
to provide an explanation of the meaning of a word or concept
consumers surplus define
The higher the risk, the higher the return.
Risk refers to the source of danger. It is a possibility of incurring some misfortune or loss. The concept of risk is very important as it helps provide cover.
this refers to the payment of premiums into a fund or pool to pay for the losses that occur