Which of the following is not applicable in life insurance contract?
(a) Conditional contract
(b) Unilateral contract
(c) Indemnity contract
(d) None of the above
Which of the following is not applicable in life insurance contract?
(a) Conditional contract
(b) Unilateral contract
(c) Indemnity contract
(d) None of the above
In a life insurance contract, the insurer pays a fixed sum of money to the insured or the insured’s beneficiaries either at the time of his or her death or on the maturity of the contract, whichever comes earlier. This implies that an indemnity contract is not applicable in the case of life insurance, as human life cannot be compensated.
In an indemnity contract, the insured is paid only the actual amount of the loss and not an assured sum. However, in the case of a life insurance contract, the insured or his beneficiaries are paid an assured sum of money in the event of death of the insured or on the maturity of the contract.
Hence, the correct answer is option (c).
In a life insurance contract, the insurer pays a fixed sum of money to the insured or the insured’s beneficiaries either at the time of his or her death or on the maturity of the contract, whichever comes earlier. This implies that an indemnity contract is not applicable in the case of life insurance, as human life cannot be compensated.
In an indemnity contract, the insured is paid only the actual amount of the loss and not an assured sum. However, in the case of a life insurance contract, the insured or his beneficiaries are paid an assured sum of money in the event of death of the insured or on the maturity of the contract.
Hence, the correct answer is option (c).
