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RIBO Questions and Correct Answers
Insurance Ans: the undertaking by one person to indemnify
another person against loss or liability for loss in respect of a
certain risk or peril to which the object of insurance may be
exposed... or to pay a sum of money or other thing of value upon
the happening of a certain event.
Major Functions of Insurance (5) Ans: 1. Basis of Credit System:
not worrying about having to pay for losses/ being liable
2. Loss Prevention and Reduction: preventing and reducing
severity of losses
3. Eliminate Worry- Encourages Entrepreneurship: allows people to
invest money in other things bc they don't have to set money aside
for losses
4. Spread of Risk: "losses of the few are shared by many"
5. Source of Employment and Investment Capital: employ over
100,000 and professionals derive income from it too
Spread of Risk Ans: "losses of the few are shared among the
many"- think of health insurance in canada*
© 2025 All rights reserved
RIBO Questions and Correct Answers
Insurance Ans: the undertaking by one person to indemnify
another person against loss or liability for loss in respect of a
certain risk or peril to which the object of insurance may be
exposed... or to pay a sum of money or other thing of value upon
the happening of a certain event.
Major Functions of Insurance (5) Ans: 1. Basis of Credit System:
not worrying about having to pay for losses/ being liable
2. Loss Prevention and Reduction: preventing and reducing
severity of losses
3. Eliminate Worry- Encourages Entrepreneurship: allows people to
invest money in other things bc they don't have to set money aside
for losses
4. Spread of Risk: "losses of the few are shared by many"
5. Source of Employment and Investment Capital: employ over
100,000 and professionals derive income from it too
Spread of Risk Ans: "losses of the few are shared among the
many"- think of health insurance in canada*
© 2025 All rights reserved
