Final answer:
The primary function of insurance is to maintain your existing level of wealth. Insurance provides financial protection against significant detrimental financial events by pooling payments from individuals and using them to compensate those who experience specified bad experiences. The correct option is c.
Step-by-step explanation:
The primary function of insurance is to maintain your existing level of wealth. Insurance is a method that households and firms use to prevent any single event from having a significant detrimental financial effect.
Generally, households or firms with insurance make regular payments called premiums. The insurance company prices these premiums based on the probability of certain events occurring among a pool of people.
If a member of the group then suffers a specified bad experience, they receive payments from the pool of money accumulated through premiums. The correct option is c.