Mr Lou who assured his life with XYZ Assurance Company, was involved in an accident and had a broken leg; the sum of #80,000 was paid to Mr Lou for his brok...
Mr Lou who assured his life with XYZ Assurance Company, was involved in an accident and had a broken leg; the sum of #80,000 was paid to Mr Lou for his broken leg. The money received is known as
Answer Details
The money paid to Mr. Lou by XYZ Assurance Company for his broken leg is known as indemnity.
Indemnity is a payment made by an insurance company to compensate a policyholder for losses suffered as a result of an insured event. In this case, Mr. Lou suffered a broken leg due to an accident, which was covered under his life insurance policy with XYZ Assurance Company. The company paid him the sum of #80,000 as indemnity for the medical expenses and other financial losses incurred as a result of the injury. Therefore, the money received by Mr. Lou is called indemnity.