 The indemnity principle means that the policy payout should restore the insured to the same financial position in which he was before the loss happened I have two term policies with sums assured of ₹20 lakh and of ₹30 lakh . They are from two different insurers. I also have a money-back policy of ₹10 lakh. If a claim was to be made, would all the three policies be enforceable? —Manish Jalan Yes, they will be enforceable. In the case of life insurance policies, the principle of indemnity does not apply. The indemnity principle means that the policy payout should restore the insured to the same financial position in which he was before the loss happened. Since the value of human life cannot be ascertained, the principle of indemnity does not apply as it is not possible to quantify the loss. Life insurance policies are fixed benefit policies. When a claim is triggered, the defined sum assured gets paid out irrespective of other existing policies of the insured. Thus, in the case of life insurance, if you have multiple plans, all of them would pay a claim independently to the nominees listed in each policy. My wife and I are planning to buy a health insurance policy that rewards policyholders for keeping good health. I believe the company monitors health and workouts through wearables. I want to know how such plans work, and how long I need to have the wearable for. Wearables capture a lot of data, so I also want to know if there are any regulations from the Insurance Regulatory Authority of India (Irdai) regarding the use of such data by the insurer. —Name withheld on request Health insurance plans which offer rewards for maintaining good health usually have their own mobile apps. When you buy the policy, you are required to download the app, which then tracks your health, the number of steps that you take, your cardiac condition, and so on. Some of this activity could be tracked through wearables as well. If the application records an improvement in health due to your lifestyle, the same is relayed to the insurer, who then offers you related benefits. There are no specific regulations against the use of such data for the insurer. However, this is an area being looked at closely by the regulator. Irdai also recently approved a few proposals under the regulatory sandbox for app-monitored wellness programmes. Abhishek Bondia is principal officer and managing director, SecureNow.in. Queries and views at Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. More Less Subscribe to Mint Newsletters * Enter a valid email * Thank you for subscribing to our newsletter. Post your comment Suggest a new Definition Proposed definitions will be considered for inclusion in the Economictimes.com Insurance
Definition: Indemnity means making compensation payments to one party by the other for the loss occurred. Description: Indemnity is based on a mutual contract between two parties (one insured and the other insurer) where one promises the other to compensate for the loss against payment of premiums. Also See: Return, Annuity, Insurable Interest, Insurability
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When an insured is to be placed in same financial position after loss as they enjoyed before the loss?Financial compensation sufficient to place the insured in the same financial position after a loss as he enjoyed immediate before it occurred. Indemnity relies heavily on evaluation and valuation and indemnity must not exceed the value of the subject mater just before the loss.
When an insured is restored to the same financial condition as prior to the loss?Indemnification. A principle of insurance which states that the individual should be restored to the approximate financial position he or she was in prior to the loss.
What is the term for an event that results in an insured loss?A. ACCIDENT: An event causing loss, which occurs without being expected or designed, usually specific in time and place. ACCELERATED DEATH BENEFITS: A provision that will pay all or part of the policy death benefits while the policyholder is still alive.
What is insurance loss minimization?According to the Principle of Loss Minimization, the insured must always try their level best to minimize the loss of his insured property, in case of sudden events like fire etc. The insured must take all necessary steps to control and reduce the losses and to save what is left.
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What is the term used when an insured is to be placed in the same financial position after a loss as they enjoyed before the loss?
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