"Life insurance is a contract of guarantee, not a contract of indemnity" explain?
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Thank you ??

Dear Student,
Life Insurance is not a contracts of indemnity. This is because according to the principle of indemnity, the purpose of an insurance contract is to bring back the insured to the same financial position as he or she was before the loss occurred to him or her (because of a mishap). But in case of life insurance, life of a person can not be brought back . Thus, the ​principal of indemnity is not applicable in life insurance.   

But, Life insurance is a contract of assurance. As the insurance company undertakes to insure the life of a person in exchange for a sum of money called premium. At the same time the company promises to pay a certain sum of money either on the death of the person or on attaining a certain age. Thus, the person is sure that a specified amount will be given to him when he attains certain age or his dependents will get the sum in the event of his death.

Hence, in this way, "Life insurance is a contract of guarantee, not a contract of indemnity".

Regards

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