Tag: meaning, importance and principles of insurance

Questions Related to meaning, importance and principles of insurance

State the following statement is True or False:
Insurance is one of the important ancillary services. 

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. True

  2. False

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Correct Option: A
Explanation:

A. TRUE

Life is full of uncertainties and thus the chances of occurrence of an event causing losses are quite uncertain. There are risks of death and disability for human life; fire and burglary risk for property; perils of the sea for shipment of goods, etc. These causes a great loss to the people. Insurance thus spreads this risk over a number of persons who are exposed to it and compensates the people suffering from these losses. Thus, it is an important ancillary service.

State the following statement is True or False:
At the event of loss, insurance policy holders submit a claim.

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. True

  2. False

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Correct Option: A
Explanation:

The policy issued to the policyholder is a promise of assistance at the time of the uncertain incident(s) for which the policy has been issued. Once the event occurs, policyholder lodges a claim to activate the insurer’s response. If the claim is accepted, the insurer will fulfill the promise by reimbursing the money assured. 

The abbreviation "AAR' stands for ______________.

organization of commerce and management business risks and insurance meaning, importance and principles of insurance features and principles of insurance meaning and definition of insurance

  1. Annual Average Risk

  2. Annual All Return

  3. Against All Risks

  4. Against Average Risk

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Correct Option: C
Explanation:

The abbreviation "AAR' stands for Against All Risk. AAR is related with insurance companies. AAR insurance is primarily referred to a health insurance company of Kenya which started its operations in the year of 1984.