12
QuizMultiple Choice

Financial Literacy — Test

Question 12 • Economics

Insurance is a financial service that allows a

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