Which of the following is not considered a consequence of pure risk?

Prepare for the CUNA Insurance Producer Test with detailed questions and comprehensive exams. Boost your confidence and get exam-ready with interactive study aids!

Pure risk refers to situations where there are only the possibilities of loss or no loss, without any potential for financial gain. It typically involves events that can lead to negative outcomes, such as accidents, illnesses, and other unforeseen incidents that can diminish value or wellbeing.

In this context, the correct choice is the option that represents a potential for gain rather than a loss. The possibility of a potential profit is not associated with pure risk because it indicates a chance for gain, which aligns more with speculative risk. Speculative risks involve uncertainty about a profit or loss outcome, which is not the case in pure risks.

On the other hand, property loss, death, and disability are all examples of pure risks. They are events that can lead to negative consequences, where the potential for loss without any chance of profit is the defining characteristic. Understanding this distinction helps clarify why potential profits fall outside the realm of pure risk.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy