Which of the following is NOT a characteristic of insurance?

The characteristic that is not typically associated with insurance is guaranteed coverage. In insurance, coverage is contingent upon the terms of the policy, the circumstances surrounding a claim, and the conditions under which the policy was issued. Insurance policies are designed to provide compensation or coverage for specific risks, but they do not guarantee that all claims will be paid or that every risk will be covered.

The primary functions of insurance include pooling of risks, where the premiums from multiple policyholders are combined to pay for the losses of the few who experience them; transfer of risks, which allows individuals or businesses to shift the financial burden of potential losses to the insurance provider; and diversification of risks, which helps spread potential losses across a wide array of policyholders, thereby reducing the impact on any single entity. These principles ensure that insurance remains a viable means of protection against uncertainties.