Ace The 75 Hour Broker Pre Licensing Practice Exam

In health insurance, which of the following best defines the concept of 'indemnity'?

Paying out a flat sum upon the insured's death. Restoring the insured to the same financial condition as before the loss. Providing unlimited benefits regardless of actual expenses. Punishing the insurer for delayed claims.

Correct Answer:

Restoring the insured to the same financial condition as before the loss.

Explanation:

The principle of indemnity states that insurance should restore the insured to their original financial position without allowing them to profit from the loss.

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