Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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If an insured individual is indemnified for the loss of a leg, this means
  1. The policy covers medical bills and possibly covers wages due to loss
  2. The policy covers medical bills only
  3. The policy covers loss of life
  4. The policy covers only lost wages
Explanation
Answer: A - If an insured individual is indemnified for the loss of a leg, the policy covers medical bills and possibly wages due to the loss. Life insurance proceeds are meant to replace the present and future income to keep the family in its current lifestyle. The indemnity is the person’s economic value or value of human life determined by present and future earning potential.
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