What are groups of people with similar insurance needs that come together to purchase insurance as a unit called?

• A. Risk Sharing Groups
• B. Insurance Cooperatives
• C. Risk Purchasing Groups
• D. Mutual Insurance Companies

Answer: (C)

The correct answer is that groups of people with similar insurance needs that come together to purchase insurance as a unit are known as Risk Purchasing Groups. These groups are formed to allow members to pool their resources in order to obtain insurance coverage that might be more difficult or costly to acquire individually. By banding together, these groups can negotiate better terms, rates, and coverage options from insurers, taking advantage of their collective bargaining power. This structure is designed to meet the specific insurance needs of the group members while also promoting risk management among them.

Risk Purchasing Groups operate under legal frameworks that encourage cooperative purchasing and are particularly beneficial for businesses or individuals in similar industries or circumstances, as they can leverage shared risks to secure more favorable insurance solutions.