(a) What is non-indemnity insurance?
(b) List and explain three types of life assurance policies.
(c) Explain the term surrender value.
(b) List and explain three types of life assurance policies.
(c) Explain the term surrender value.
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Correct Answer: Option n
Explanation:
(a) Non-indemnity insurance: Refers to those associated risks for which no amount of compensation could equate to the loss suffered by the insured however only a consolation payment is made to the insured.
(b)(i) Whole life assurance
Endowment policy
Term assurance
(i) Whole life assurance: In this case, the insurance company pays a definite sum of money on the death of the policy holder.
(ii) Endowment assurance: Here, the insurance company pays the policy holder the amount assured when the person who is insured attains a certain age or when such a person dies, which ever comes first.
(iii) Term assurance: In this case, the life of the policy holder is insured for particular period but he gets paid by the insurance company if death occurs within this period.
(c) Surrender value: This is the amount paid to an insured, when he opts to discontinue with the payment of a life policy.
(a) Non-indemnity insurance: Refers to those associated risks for which no amount of compensation could equate to the loss suffered by the insured however only a consolation payment is made to the insured.
(b)(i) Whole life assurance
Endowment policy
Term assurance
(i) Whole life assurance: In this case, the insurance company pays a definite sum of money on the death of the policy holder.
(ii) Endowment assurance: Here, the insurance company pays the policy holder the amount assured when the person who is insured attains a certain age or when such a person dies, which ever comes first.
(iii) Term assurance: In this case, the life of the policy holder is insured for particular period but he gets paid by the insurance company if death occurs within this period.
(c) Surrender value: This is the amount paid to an insured, when he opts to discontinue with the payment of a life policy.