Final answer:
All forms of insurance provide financial protection against specified risks and require periodic premium payments. However, not all forms of insurance involve a deductible, and they definitely do not guarantee a profit for the insured.
Step-by-step explanation:
All forms of insurance provide financial protection against specified risks and require periodic premium payments. However, not all forms of insurance involve a deductible, and they definitely do not guarantee a profit for the insured.
A deductible is the amount of money that the insured must pay out of pocket before the insurance coverage kicks in. While many forms of insurance, such as car and health insurance, often involve a deductible, it is not a requirement for all types of insurance.
In regard to guaranteeing a profit for the insured, insurance companies operate on the principle of risk pooling. They use premiums collected from policyholders to cover the costs associated with claims and operational expenses. Insurance companies aim to manage their risks through underwriting and pricing, so they can maintain solvency and pay claims while making a profit for themselves, not for the insured.