Insurance Awareness - Life Insurance - LIC
Which feature of life insurance ensures that the insured must have a financial stake in the life insured at the time the policy is taken?
Which feature of life insurance ensures that the insured must have a financial stake in the life insured at the time the policy is taken?
easy Q2 of 15
Step-by-Step Solution
Step 1: Recall the meaning of Insurable Interest
Insurable Interest means the insured must have a financial or emotional interest in the life insured at the time the policy is initiated.Step 2: Evaluate other principles
Utmost Good Faith relates to disclosure, Indemnity applies to general insurance, and Subrogation is about insurer's rights after claim payment.Final Answer:
Insurable Interest → Option BQuick Check:
Only Insurable Interest ensures the insured has a financial stake at policy inception.
Quick Trick: Insurable Interest must exist at policy start.
Common Mistakes:
MISTAKES- Confusing Insurable Interest with Utmost Good Faith.
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