Question

Fund life & health insurance

Explain carefully why this statement is true

As an absolute figure, the amount of an insurer’s capital and surplus has little meaning.

Answer 1

This statement is TRUE, as Fund life and health insurance is made on a person's life and the insurance is subject to a premium which is paid by the policyholder on the term period (installments). Health insurance is safe as if any person is suffered with any accidents, disease or any unfortune conditions the health insurance policy will cover all the damages caused by these situations.

The other statement states that one may take the insurance of Capital which is brought by the proprietor. The proofits which he have gained through the business is known as SURPLUS which he derives from business.

These two terms are irrelated to each other as the insured capital is not propotinate to the surplus gained to the business.

Therefore, said statement is correct.