Which of the following best describes a risk that is insurable in the traditional life and health market?

Why this is the answer

Risk is divided into pure and speculative. A pure risk has only two possible outcomes — loss or no loss — and includes events like premature death, disability, illness, fire, or auto accident. A speculative risk includes the possibility of gain as well as loss, like gambling or stock investing. Insurance is the financial-transfer mechanism for pure risk only; speculative risks are pursued voluntarily for their upside and would create incentives to cause the loss if insured. Variable products are not an exception — the insurance component covers pure mortality risk; the investment subaccounts are not insured against market loss. Per the Florida Agent's Health & Life Exam Content Outline.