Ans. This Statement
is False.
1. Indemnity means a guarantee or assurance to
put the insured in the same position in which he was immediately prior to the
happening of the uncertain event.
2. The insurer
undertakes to make payment of actual loss incurred by the insured.
3. Insurance contract
is signed only for getting protection against unpredicted financial losses
arising to the future uncertainties. Compensation is paid in proportion to the
losses incurred.
4. All the above
quality of indemnity is not applicable to Life insurance as a human life cannot
be valued in terms of money for calculating the actual loss.
5. Thus, the
principle of indemnity is applicable to life insurance.
