The correct answer is D. Losses of a few persons are shared by many persons thus reducing the burden of contribution to loss compensation.
Insurance is a way of spreading the risk of loss over a large number of people. When you buy insurance, you are essentially agreeing to share the cost of any losses that occur with other people who have also bought insurance. This means that if you do suffer a loss, you will not have to bear the entire cost yourself. Instead, the cost will be shared by all of the people who have insurance.
This can be a very helpful way to protect yourself from financial hardship in the event of a loss. For example, if you have car insurance and your car is stolen, you will not have to pay for a new car out of your own pocket. Instead, the insurance company will pay for the car, and you will only have to pay a deductible.
Insurance can also help to protect you from other types of losses, such as medical expenses, property damage, and liability claims. If you have the right type of insurance, you can be sure that you will be financially protected in the event of a loss.
Here is a brief explanation of each option:
- Option A: In insurance subsidy plays a part in fixing premium. This is not always the case. In some cases, the government may provide subsidies to help people afford insurance. However, this is not always the case, and the amount of the subsidy may vary depending on the type of insurance and the person’s income.
- Option B: Losses are shared by subsidy. This is not correct. Losses are not shared by subsidy. Instead, losses are shared by the people who have insurance. When you buy insurance, you are essentially agreeing to share the cost of any losses that occur with other people who have also bought insurance.
- Option C: A few persons have to share the loss of many. This is not correct. In insurance, the losses of a few persons are shared by many persons. This means that if you do suffer a loss, you will not have to bear the entire cost yourself. Instead, the cost will be shared by all of the people who have insurance.
I hope this helps!