Multiple choice

Directions: Choose the correct option for the given question:

Life insurance is a contract of which of the following?

  1. Indemnity

  2. Guarantee

  3. Contribution

  4. Subrogation
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Life insurance is fundamentally a contract of guarantee, not indemnity. Unlike property insurance which aims to restore the insured to their original financial position (indemnity), life insurance guarantees a predetermined sum upon death/maturity. The insured's life cannot be valued in monetary terms, so indemnity principle doesn't apply. Contribution and subrogation are principles applicable to indemnity contracts, not life insurance.

Keep practicing — related questions