Question

How does the insurance company determine the indemnity to be paid under the Principle of Indemnity?

a.

By offering a profit to the insured

b.

By assessing the economic value of the loss suffered

c.

By paying the full sum insured irrespective of the loss

d.

By making the insured negotiate the settlement

Posted under IC38 Life Insurance Agent Exam

Answer: (b).By assessing the economic value of the loss suffered Explanation:The insurance company assesses the economic value of the loss suffered and compensates accordingly.

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Q. How does the insurance company determine the indemnity to be paid under the Principle of Indemnity?
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