Insurance Awareness - Life Insurance - LIC
Which principle in life insurance requires both parties to disclose all material facts honestly?
Which principle in life insurance requires both parties to disclose all material facts honestly?
medium Q4 of 15
Step-by-Step Solution
Step 1: Recall insurance principles
Utmost Good Faith (Uberrimae Fidei) mandates honest disclosure of all material facts by both insurer and insured.Step 2: Differentiate other principles
Contribution and Subrogation relate to claim settlements; Proximate Cause relates to cause of loss.Final Answer:
Utmost Good Faith → Option AQuick Check:
Only Utmost Good Faith deals with disclosure of material facts.
Quick Trick: Utmost Good Faith = full disclosure by both parties.
Common Mistakes:
MISTAKES- Confusing Utmost Good Faith with Indemnity or Contribution.
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