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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Which of the following is a secondary function of insurance?

Increased risk-taking
Aid to Security
Reducing premiums
Decreasing investment opportunities

The correct answer is: Aid to Security

Insurance has two primary functions risk reduction and risk distribution. These translate to risk-taking and security within the choices provided. Increased risk-taking (option A) would be the opposite of what insurance aims to achieve. Reducing premiums (option C) may seem like a secondary function, but in reality, it is simply a factor that determines risk reduction and distribution. Decreasing investment opportunities (option D) does not pertain to the functions of insurance and may, in fact, indirectly cause increased risk-taking. On the other hand, aid to security (option B) is a clear secondary function of insurance as it provides a safety net for individuals in case of unexpected events that could cause financial harm. This aligns with the primary function of risk reduction and distribution, making it a logical and correct answer.