Which of the following is not a principle of insurance
Answer Details
The principle of Surrender value is not a principle of insurance. Surrender value is the amount of money paid to the policyholder when they voluntarily terminate their life insurance policy before its maturity or death. The principles of insurance are guidelines that ensure that the insurance policy is valid, enforceable, and meets the needs of both the policyholder and the insurer. The other principles of insurance include insurable interest, subrogation, and proximate cause. The insurable interest principle states that the policyholder must have a legitimate interest in the insured property, and in the case of life insurance, the policyholder must have an insurable interest in the person whose life is insured. The principle of subrogation means that the insurer can take over the rights of the policyholder to recover from a third party that caused the loss. The principle of proximate cause requires that an insured event must be the result of an insured peril and not an excluded peril.