General
Risk Pool
The group of policyholders whose premiums fund payouts for the few who file claims.
What it actually means
Insurance works by pooling risk: many people pay premiums into a shared pool, and the (relatively few) people who experience a covered loss get paid from it. Your individual premium reflects both your own risk and the broader pool you're grouped with.
Example: In a health insurance risk pool, premiums from healthy members help fund the larger claims of members who get seriously ill.
See it in context
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