Question

Why life insurance called as life assurance? Why is the principles of indemnification of losses not applicable to life assurance?
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Answer 1

Answer:

The indemnity principle means that the policy payout should restore the insured to the same financial position in which he was before the loss happened. Since the value of human life cannot be ascertained, the principle of indemnity does not apply as it is not possible to quantify the loss.

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