Page 317 - Misc Ebook IC 78

Miscellaneous Insurance

indemnity does come into play. Majority of these policies
are termed 'benefit policies' as they are distinct from
the indemnity policies.

This is because in the event of happening of an insured
event a specified sum of money is payable irrespective
of the amount of pecuniary loss actually suffered by the
insured or his dependents, which in any case cannot be
measured. However, this does not mean that the insured
can make unnecessary profit out of this policy.

When policies are issued to employers to reimburse their
employees or their dependents on the disablement or
the death of their employees, the insured are indemnified
with the exact amount of compensation paid by them.
Another example is that if a person earns Rs 1000/month,
but approaches an insurer with a 1 lakh personal accident
insurance proposal, it is most likely to get rejected.

Although it is difficult to specify the exact amount of
cover to be granted (as it varies from insurer to insurer)
usually a cover is granted of an amount equivalent to 60

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