(a) What is non-indemnity insurance? (b) List and explain three types of life assurance policies....

Explanation

(a)Non-indemnity insurance: Refers to those associated risks for which no amount of compensation could equate to the loss suffered by the insured however only a consolation payment is made to the insured.

(b)(i) Whole life assurance

Endowment policy

Term assurance

(i)Whole life assurance: In this case, the insurance company pays a definite sum of money on the death of the policy holder.

(ii)Endowment assurance: Here, the insurance company pays the policy holder the amount assured when the person who is insured attains a certain age or when such a person dies, which ever comes first.

(iii)Term assurance: In this case, the life of the policy holder is insured for particular period but he gets paid by the insurance company if death occurs within this period.

(c)Surrender value: This is the amount paid to an insured, when he opts to discontinue with the payment of a life policy.