Which of the following is a key function of insurance?

The key function of insurance is to provide financial resources in case of loss. This is fundamental to the purpose of insurance itself, which is designed to protect individuals and businesses from financial hardship resulting from unexpected events, such as accidents, illnesses, property damage, or death. Insurance allows policyholders to transfer the risk of financial loss to the insurer, which, in turn, pools the risks of many clients to mitigate the impact of potential losses.

While other options may seem relevant, they do not capture the core purpose of insurance. Ensuring investments yield profit is more related to investment strategies rather than insurance functions. Eliminating all risks associated with activities is unrealistic, as insurance does not remove the risk but rather provides coverage for potential financial impacts. Assessing the moral character of applicants may be a part of underwriting, but it is not a primary function of insurance—it is simply one method to evaluate risk when determining coverage eligibility. Therefore, the provision of financial resources in response to loss is the most accurate representation of a key function of insurance.