Principles of Insurance (Grade 12 NSC Matric Business Studies): Flashcards
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Premium in insurance
Premium in insurance
Regular amounts paid by insured to insurer
Four key insurance principles
Four key insurance principles
Indemnity, security, utmost good faith, insurable interest
Indemnification principle means
Indemnification principle means
Compensation for actual loss, restore same financial position
Indemnity applies to which insurance type
Indemnity applies to which insurance type
Short-term insurance (car, home, business)
Can you profit from indemnity insurance?
Can you profit from indemnity insurance?
No, only restored to original financial position
Security/certainty principle means
Security/certainty principle means
Guaranteed predetermined payout for specific events
Security applies to which insurance type
Security applies to which insurance type
Long-term insurance (life, retirement)
Utmost good faith principle means
Utmost good faith principle means
Complete honesty and disclosure from both parties
Insurable interest means
Insurable interest means
Must prove genuine financial loss if item damaged/lost
Breaking insurance principles results in
Breaking insurance principles results in
Can invalidate entire insurance contract