8
QuizMultiple Choice

Personal Finance — Test

Question 8 • Personal Finance and Economics

Insurance is a financial service that allows a

Answer
A
consumer to transfer all risk to a company.
B
company to maximize risk for a consumer.
C
consumer to share liability with a company.
D
company to control finances for a consumer.

Explanation

Insurance lets a consumer pay a premium so an insurance company takes on the financial risk of certain covered losses. It does not transfer every possible risk, but among these choices, “consumer to transfer all risk to a company” best describes the basic purpose of insurance.

AI-written and checked against the verified answer.

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