Alberta General Insurance Level 1 Practice Exam

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Ace your Alberta General Insurance Level 1 Exam with our comprehensive practice quiz. Tailored to mimic the real test, our quiz offers detailed explanations, expert tips, and all you need to succeed. Start your path to becoming a licensed professional today!

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How does participation in a subscription policy benefit insurers?

Increases the total premium per insurer
Reduces individual risk by spreading it across multiple insurers
Ensures government subsidies
Guarantees policy renewals

The correct answer is: Reduces individual risk by spreading it across multiple insurers

Participation in a subscription policy benefits insurers by reducing individual risk. This is because by spreading the risk across multiple insurers, it decreases the likelihood of any one insurer having to pay out a large sum. This, in turn, allows for more stable premiums and overall financial stability for the insurer. Options A, C, and D are incorrect because they either focus on increasing premiums or ensuring government subsidies and policy renewals, which may have benefits for the insurers but are not directly related to reducing risk.