Question

Without disclosing that he is suffering from TB, Mr . A gets himself insured against death for 10,00,000. He lives for another 3-4 years and dies due to TB. The insurance company comes to know about Mr. A's illness only after his death. Now, under these circumstances the insurance company is not liable to pay anything to the dependents of Mr.A as the contract between the insurance company and Mr. A is void. Identify the principle of insurance to which the above example relates.

1 point

Utmost good faith

Insurable interest

Indemnity

Subrogation

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Answer 1

Answer:

Utmost Good Faith

Explanation:

This is because in this principle, the insurer and the insured must provide clear and concise information regarding the terms and conditions of the contract. In this problem, Mr. A failed to inform the insurance company about his illness. Thus, they failed to create good faith.