Insurance Policies and Claims

A compensation paid by the insurer to the insured for a particular loss suffered by the latter is called indemnity.

A contingent contract is a contract to do or not to do something if some event collateral to such contract does not happen. A contingent contract depends upon the happening or non-happening of a certain event. If such event takes place, then a contingent contract becomes valid and if that uncertain event does not take place, then a contingent contract becomes void. A contract of life insurance, the performance of which depends upon a future event, falls under the category of a contingent contract.

The contract of general insurance is a contingent contract because the terms are not final, and are based on certain events or conditions occurring.

In this kind of policy the amount is not payable before the death of the assured. Hence, the policy money or amount becomes payable only to the legal heir of the assured.

 The principle of causa proxima is not applied to life insurance. In life insurance just the sum assured is paid on the maturity period or death whichever is earlier, and hence the principle of nearest cause is not applicable.

 When the goods are dispatched by rail or road transport for shipment, a single policy may cover all the risks from the point of origin to the point of destination, which is block policy. Thus, block policy covers the risk of land ( rail or road transport ) and the risk of water also ( ship transport ).

Fidelity insurance is a protection against cashier. Bank, loan companies and other businesses commonly use such insurance policies for cashiers and other employees who handle company funds. The employer is insured against loss upto the amount of policy.

 The life insurance is a contract of assurance. In life insurance the sum assured is bound to be paid sooner or later. The insurer is bound to be paid the policy amount either on the death of the insured or on the expiry of time period of policy whichever is earlier.

All motor vehicles must have third-party insurance. Non-mechanical vehicles (like cycles) are not motor vehicles. Therefore, vehicles without mechanical devices are not motor vehicles and don't require third-party insurance. This is a valid syllogism - if not motor vehicle, then insurance requirement doesn't apply.

Here, it must either apply to or explicitly exclude all possible situations.

Prepaid expenses (e.g. prepaid insurance premiums) are usually used within a year after the balance sheet date and thus, are considered a current asset.

Rashtriya Krishi Vikas Yojna was launched in 2007-08 to enhance investment to achieve 4% growth rate in agriculture. 

Bima Gold is a life insurance policy offered by LIC (Life Insurance Corporation of India), the largest state-owned insurance company in India. The question tests knowledge of specific insurance products.

In case the proponent has no insurable interest in the insured, the underwriter will accept with reduced sum assured.

An agent licenced to act as such for an insurer is required to have a licence under Section 42 of the Insurance Act, 1938 for procuring and continuing insurance business against payment of commission by the insurer. Banks can now act as brokers for life insurance businesses. It is not mandatory for an individual to be a trained person to work for an insurance company. Hence, option (2) is the correct answer.