How Does Principle Of Indemnity Apply In Life Insurance?


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Anonymous Profile
Anonymous answered


Life Insurance



In Life Insurance we offer covers to protect the individual against of the
    "dying too early or living too long".



Dying too


Each individual has got a certain financial value attached to his life
    in the form of his earning potential.
    If he dies at a young age or during the time when he had an earning
    potential his family suffers a financial loss in the form of loss of his
    potential earnings.
    A lot of his obligations towards the family remain unfulfilled due to his
    sudden demise.
    This is called the Risk of Dying too early and it can be protected against
    by taking life insurance coverage.



Living too


Every individual plans his life & his sources of income to the best
    of his ability taking into account his life expectancy.
    Sometimes, despite the best of planning the individual is not able to
    provide for contingencies such as serious / chronic / prolonged illness for
    himself or his spouse which results in all the planning going haywire.
    If a person survives beyond his expected age his planned sources of income
    could diminish or become inadequate due to a variety of reasons.
    This could result in his not having money at the time when he needs it most
    and is not in a position to go and earn the same.
    We call this the risk of living too long and protect against the same by
    taking whole life insurance policies where withdrawals are possible as
    & when required or by taking Pension policies or annuities.


meaghan peterside Profile
Well  the  principle  of  indemnity  has  no  whole life  with  life  assurance  that  is  simply  because the  principle  of  indemnity  deals  on  the  restoration  of  the  insured  to  its  former  position  which  in  any  case  cannot  be  done  be  it  in  the  different  types  of  life  assurance  policies;  endowment  , whole life  and  what  have  you.

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