Misrepresentation and non-disclosure constitute breach of utmost good faith. In an insurance policy, misrepresentation on the behalf of the insured gives the insurance company a right to terminate the policy. Non-disclosure means failure to divulge a relevant fact when applying for an insurance policy. This is a violation of the principle of good faith which should be observed in insurance negotiations.

In commercial contracts, the principle to be observed is Caveat Emptor. Caveat emptor is a Latin term that means "let the buyer beware." Similar to the phrase "sold as is," this term means that the buyer assumes the risk that a product may fail to meet expectations or have defects.

In Life Insurance type of contract, the happening of event is certain but its timing is not known. The event insured against is sure to happen only the time of its happening is not known.

Life insurance is possible because Death is certain but its timing is uncertain.

Life insurance policy, in general, is a mixture of Protection and Savings. Life insurance plans are good tax-saving instruments. All the premiums you pay under a term plan are exempt from income tax deductions as per section 80C.

Both the statements are incorrect.
Mutuality is the principle of private, commercial insurance; individuals enter the pool for sharing losses, and pay according to the best estimate of the risk they bring with them and Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio.

The person who makes the offer is called the Proposer and the person who accepts the offer in an insurance contract is called the Insurer.

At young age, one tends to be aggressive. It means behaving in an angry and violent way towards another person.

The lesser the period of investment, the greater they will multiply is incorrect because if period of investment will be less, the result will also be less.

Cost of the risk is product of Probability and impact. This means that the total amount of risk exposure is the probability of an unfortunate event occurring, multiplied by the potential impact or damage incurred by the event. If you put a dollar value on the impact, then you can value the risk and in a simple way compare one risk factor to another.

Considering insuring an ordinary ball pen is an example of don’t risk more than you can afford to lose and don’t risk a lot for a little.

Providing social security is the obligation of State. States must progressively realise the right to social security through measures to offer protection, through cash or in kind, which enables individuals and families to acquire at least essential health care, basic shelter and housing, water and sanitation, food, and the most basic forms of education.

Rajeev Gandhi Equity Scheme is not an example of social security schemes of the Government. The scheme is aimed at encouraging the flow of savings of small investors in the domestic capital market, and presents investors with tax benefits provisioned as a new section, 80CCG, in the Income Tax act.

Considering insuring an oil refinery is example of don’t risk more than you can afford to lose.

The system of insurance benefits individual, family and the society. Insurance benefits individuals, organizations and society in more ways than the average person realizes. Insurance meets statutory and contractual requirements as well as provides evidence of financial resources. Another very important benefit of insurance is promoting risk control activity.

All the statements are incorrect.
Insurance does not promotes efficient use of existing resources, Insurance does not contribute to healthy economy and national productivity and Insurance policy cannot be used as a collateral security.

In Variable insurance plan, the policy reserves are placed in Separate fund which do not form part of its general investment account.

In Variable life insurance policy, death benefits and cash value varied with investment experience. A variable life insurance policy does offer a guaranteed death benefit, which will not fall below a minimum amount even if the invested assets devalue significantly. The variable death benefit is equal to the cash value at the time of death, plus the face value of the insurance.

Human Life Value concept measures the value of a human life on the basis of his Net earnings. The human life value concept deals with human capital, which is a person's income potential. It goes beyond just the numbers and considers the overall impact of losing someone, especially the breadwinner.

Human Life Value can be arrived at by dividing Net earnings by Rate of interest.

Both the statements are correct in respect of traditional plans.
Policyholder’s bonus depend on periodic valuation of Assets & Liabilities and Bonus did not directly reflect the value of assets of the insurer.

In Unit Linked policies, the benefits are determined by the Value of units credited to the policyholder’s account on the date on which payment is due.

Units in a Unit Linked policy are purchased through payment of a Single premium or Regular premium.

As per HLV concept, the amount of insurance one can buy could be 10 to 15 times of one’s annual income. We have already seen that an asset is a kind of property that yields value or a return. For most kinds of property the value is measured in precise monetary terms. Similarly the amount of loss of value can also be measured.