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The principle of ______ is not applicable to life insurance. - Organisation of Commerce and Management

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Question

The principle of ______ is not applicable to life insurance.

Options

  • insurable interest 

  • utmost good faith

  • indemnity

MCQ
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Solution

The principle of indemnity is not applicable to life insurance.

Explanation:

The principle of indemnity means compensation is given only to cover the actual loss. It does not apply to life insurance because human life cannot be measured in money. Life insurance pays a fixed sum assured, not the actual financial loss suffered.

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Chapter 4: Business Services - EXERCISE [Page 90]

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