Question

How does life insurance differ from general insurance?

a.

Life insurance policies are contracts of indemnity, while general insurance policies are contracts of assurance.

b.

Life insurance contracts are short-term and expire annually, while general insurance contracts are generally long-term.

c.

General insurance policies cover risks that are certain to happen, while life insurance covers uncertain risks such as accidents.

d.

General insurance policies are contracts of assurance, while life insurance policies are based on indemnity.

Posted under L01 What Life Insurance Involves IC38 Life Insurance Agent Exam

Answer: (a).Life insurance policies are contracts of indemnity, while general insurance policies are contracts of assurance. Explanation:Life insurance policies are contracts of assurance, meaning they provide a fixed benefit in the event of death. General insurance policies are typically contracts of indemnity, where the insurer compensates the exact amount of loss, no more and no less, for events like fire or accidents.

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