Alberta General Insurance Level 1 Practice Exam 2025 - Free Insurance Exam Practice Questions and Study Guide

The primary function of insurance is to share and spread risk among a large group of individuals. This helps to protect individuals and businesses from financial losses that may occur due to unexpected events. Option A ("To eliminate risk") is incorrect because insurance does not completely eliminate risk, but rather helps to mitigate it. Option C ("To invest premiums") is also incorrect because while insurance companies may invest premiums, it is not their primary function. Option D ("To provide employment") is incorrect because while employment may be a secondary outcome of insurance companies, it is not their main purpose.