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AzJose AzJose
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6 years ago
In determining insurance limits and deductibles, an important concept is that insurance should be used to pay big losses rather than small losses. The objective is to insure big losses that could cause financial ruin and to exclude small losses that can be budgeted out of current income. This concept is called the
A) law of large numbers.
B) efficient loss-cost concept.
C) large-loss principle.
D) retention-transfer tradeoff.
Textbook 
Principles of Risk Management and Insurance

Principles of Risk Management and Insurance


Edition: 12th
Authors:
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