Page 296 - Ebook health insurance IC27
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The Insurance Times
Introduction to
Medical Insurance
Section 1
Risk and Medical Insurance
Introduction
Risk traditionally has been defined in terms of uncertainty of incurring a loss. In insurance,
this risk is transferred from individuals to the insurer who is willing to combine the risk of
many individuals and provide the necessary protection to any individuals should a loss
occur. In exchange for this protection, each individual pays a contribution (known as a
premium), which forms a pool of funds that will be used by the insurer to pay the loss
incurred.
Characteristics of an insurable risk
Risk must have certain characteristics in order to be insurable. The potential loss incurred
through medical expenses must be:
300 Guide for Health Insurance
