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Question
Which of the following are the characterics of insurance?
Options
It is a contract of indemnity.
It covers the risk of uncertain event in future.
It is based on the principle of cooperation whereby one person's loss is shared by many persons.
All of these
MCQ
Solution
All of these
Explanation:
- Insurance is a contract between two parties.
- One party (insured) agrees to pay a premium in a lump sum or in instalments at periodical intervals.
- The other party (the insurer) undertakes to compensate the insured against losses up to the specified limit.
- It is a contract of indemnity.
- It covers the risk of an uncertain event in the future
- It is based on the principle of 'cooperation' whereby one person's loss is shared by many persons.
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