Multiple choice

Which of the following is an incorrect feature of life insurance?

  1. It has elements of protection and investment or both.

  2. Insurable interest must be present at the time of effecting the policy, but need not be necessary at the time when the claim falls due.

  3. It is based on the principal of indemnity.

  4. Life insurance has a surrender or paid up value.

  5. There is an element of certainty in life insurance.
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C Correct answer
Explanation

No, life insurance is not based on the principal of indemnity. The sum assured is either paid on the happening of a certain event or on maturity of the policy.

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