The correct answer is A. Sharing the losses of many by a few.
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 may occur with a group of 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.
There are many different types of insurance, but they all work in the same basic way. When you buy insurance, you are essentially paying a premium to an insurance company. The insurance company then uses this money to pay out claims to people who have suffered losses.
The amount of the premium you pay will depend on a number of factors, including the type of insurance you are buying, the level of risk you are taking, and the financial stability of the insurance company.
Insurance can provide peace of mind and financial security in the event of a loss. It is important to choose the right type of insurance for your needs and to make sure that you are buying from a reputable insurance company.
Here is a brief explanation of each option:
- Option A: Sharing the losses of many by a few. This is the correct answer. 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 may occur with a group of 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.
- Option B: Sharing the losses of few by many. This is not the correct answer. Insurance is not about a few people sharing the losses of many. It is about a large number of people sharing the losses of a few.
- Option C: One sharing the losses of few. This is not the correct answer. Insurance is not about one person sharing the losses of a few. It is about a large number of people sharing the losses of a few.
- Option D: Sharing of losses through subsidy. This is not the correct answer. Insurance is not about sharing losses through subsidy. It is about sharing losses through a pooling of risk.