Question

Define life insurance. What are its main principles ​

Answer 1

Answer:

Insurance is a contract in which the individual or an entity gets the financial protection in other words reimbursement from the insurance company for the damage (big or small) caused to their property.

The insurer and the insured enter a legal contract for the insurance called the insurance policy that provides financial security from the future uncertainties.

In simple words, insurance is a contract, a legal agreement between two parties, i.e., the individual named insured and the insurance company called insurer. In this agreement, the insurer promises to help with the losses of the insured on the happening contingency. The insured, on the other hand, pays a premium in return for the promise made by the insurer.

The contract of insurance between an insurer and insured is based on certain principles, lets us know the principles of insurance in detail.

Principles of Insurances are:

Utmost Good Faith

Proximate Cause

Insurable Interest

Indemnity

Subrogation

Contribution

Loss Minimization

Let us understand each principle of insurance with an example