Question

Ms. Garima takes out a life insurance policy and designates her sister as the beneficiary. Unfortunately, Ms. Garima passes away due to a sudden illness.

1. Will Ms. Garima’s sister be able to claim the insurance? Why?
2. Identify the insurance principle involved.

Answer 1

1. The insurance will be available for Ms. Garima’s sister to claim. Ms. Garima signed a contract with the insurance firm based on the idea of the highest good faith when she bought the life insurance policy. The insurer must honour the claim and pay the death benefit to the specified beneficiary upon the insured’s death as long as the policy is in effect.
2. Utmost Good Faith is the insurance concept that applies.