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receives brokerage as a percentage of the premium from

the insurer.

13. Is having an insurance policy enough?

In spite of number of advantages of insurance, it has certain

limitations. On account of such limitations, the benefits of

insurance cannot be availed in full and hence having an

insurance policy is not enough.

 All the risks cannot be insured. Only pure, identifiable risks

can be insured and speculative risks are not insurable.

 Insurable interest (financial interest) i.e. the subject

matter of insurance either at the time of insurance or at

the time of loss, or at both the times must be present, in

the absence of which the contract of insurance becomes

void.

 In case the loss arising from the happening of the event

cannot be valued in terms of money, such risks are not

insurable.

 Another important limitation is that the premium rates are

higher in some countries & as such, certain category of

people cannot avail the advantage of insurance. The main

reason for the higher rate of premiums is the higher

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