A plan where the policyholder pays a defined premium to an insurer and does not share in the risk attached to actual claims

A plan where the policyholder pays a defined premium to an insurer and does not share in the risk attached to actual claims

• A. Deductible Plan
• B. Mediation
• C. Insured Plan
• D. IBNR

Answer: (C)

Understanding how risk is handled in insurance helps here: an insured plan means the policyholder pays a fixed premium and the insurer bears the risk of actual claims, so the policyholder does not share in the variability of claims. This contrasts with a deductible plan, where the insured must pay part of each claim before coverage kicks in and thus shares in the risk. Mediation is about resolving disputes, not risk transfer, and IBNR relates to estimating claims that haven’t been reported yet. So the option that describes paying a set premium to transfer the risk entirely to the insurer is the insured plan.

Understanding how risk is handled in insurance helps here: an insured plan means the policyholder pays a fixed premium and the insurer bears the risk of actual claims, so the policyholder does not share in the variability of claims. This contrasts with a deductible plan, where the insured must pay part of each claim before coverage kicks in and thus shares in the risk. Mediation is about resolving disputes, not risk transfer, and IBNR relates to estimating claims that haven’t been reported yet. So the option that describes paying a set premium to transfer the risk entirely to the insurer is the insured plan.