Forums » Life Insurance

Characteristics of Insurable Risks 1 and 2

    • 144 posts
    February 28, 2014 7:12 AM IST

    1. The Loss Must Occur by Chance:


    The loss should be caused either by an unexpected event or by an event that is not intentionally

    caused by the person covered by the insurance.
    2. The Loss Must be Definite:


    An insurable loss must be definite in terms of time and amount.

    The amount of economic loss resulting from death, illness, disability, and old age can be subject

    to interpretation.


    A Contract of indemnity is an insurance policy under which the amount of the policy benefit

    payable for a covered loss is based on the actual amount of financial loss that results from the

    loss, as determined at the time of loss.


    Claim is a request for payment under the terms of the policy.


    A valued contract specifies the amount of the benefit that will be payable when a covered loss

    occurs, regardless of the actual amount of the loss that was incurred.


    The amount of the death benefit is called the policy’s face amount or face value.

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