General Insurance PrinciplesQuestion 179 of 315
Which of the following is an example of a pure risk that an insurer would accept?
a.Betting on the outcome of a sporting event
b.The possibility that an insured will die during the policy term
c.Opening a new restaurant in a competitive market
d.Buying stock in a technology start-up
Explanation
Only pure risk, which involves the chance of loss or no loss with no opportunity for gain, is insurable. Investments, business ventures, and gambling are speculative risks because they include a chance of gain and are not insurable.
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Sen Lin, PrepPass Founder · Verified against California Life & Health Insurance License Exam · How we review
Reviewed by John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — verify)