An insurer having a large number of similar exposure units is considered important because

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An insurer having a large number of similar exposure units is considered important because

A) the insurer can decrease its reserves
B) the greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums
C) its financial rating will improve
D) the greater the number insured, the more premiums it collects

Answer: B) the greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums

Nature of Insurance

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An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?

An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay? a) $0 b) $30,000 c) $32,000 d) $40,000 Answer: B

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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

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