The Principle of Indemnity does not apply to life and health insurance.

Question

Quizplus · Accepted Answer

The Principle of Indemnity states that an insurance policy should compensate the policyholder for their actual financial loss, but this principle does not apply to life and health insurance policies. In life insurance, the beneficiaries receive a fixed amount upon the insured's death, regardless of their actual financial loss. In health insurance, the policy may cover the full cost of medical expenses, even if they exceed the actual financial loss suffered by the policyholder.

The Principle of Indemnity Does Not Apply to Life and Health