Question

What is the difference between "reinsurance" and

Q: Answer-What is the difference between 'reinsurance' and 'co-insurance'?

Reinsurance involves risk-sharing between insurers, while co-insurance involves risk-sharing between multiple insurers, to distribute large risks that are beyond the capacity of a single insurer.

"co-insurance"?

A Reinsurance is a risk-sharing agreement between insurers, while co-insurance is a risk-sharing agreement where multiple insurers jointly share the risk of insuring a policyholder.

B Reinsurance applies to life insurance, while co-insurance applies to property insurance.

C Reinsurance is mandatory, while co-insurance is optional.

D Reinsurance is used to increase coverage, while co-insurance is used to reduce premiums.

E None of the above

Practice Next

More Insurance Awareness Questions

Which section of balance sheet shows ‘deferred tax liability’?
What is the amount of loan support provided by the World Bank under the MERITE scheme?
A 'Sovereign Gold Bond' is issued by:
If two mutually exclusive investment projects have identical payback periods but generate different total cash inflows over their respective lifespans, ...
Which of the following will be considered as the long-term objective of financial management?
In the Indian debt market, which of the following is a key intermediary that guarantees the subscription of a bond issue?
What is the minimum amount of loan outstanding of a borrower or guarantor, for them to be classified as a Wilful Defaulter?
_________ is a method to sell securities to the existing shareholders of a company.
Under the CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) scheme, which of the following would be treated as primary security for a...
Calculate Capital Gearing Ratio of the company?

What is the difference between "reinsurance" and

Solution