The principle of subrogation does not apply to ________.

Correct option is A

The principle of subrogation states that after the insurer compensates the insured for a loss, the insurer acquires the legal right to sue or recover the loss amount from the third party responsible for the damage. This principle is applicable only to contracts of indemnity, where the insurer compensates the actual value of loss.
Life insurance is not a contract of indemnity. It is a contingent contract, where the insurer pays a pre-decided sum (sum assured) on death or maturity, irrespective of the economic loss suffered. Since life cannot be valued or indemnified, the insurer cannot claim rights against a third party after paying the insured.
Therefore, the principle of subrogation does not apply to Life Insurance, making (a) the correct answer.
Information Booster
1. Subrogation applies mainly to fire, marine, and general insurance, as all these are indemnity contracts.
2. In indemnity contracts, the insured cannot make a profit—only compensation for actual loss is paid.
3. Subrogation prevents double recovery for the same loss by the insured.
4. Life insurance payouts are based on the sum assured, not actual financial loss.
5. Life insurance focuses on risk protection, investment, and savings.
Additional Information
· (b) Marine Insurance: Subrogation applies because it is an indemnity contract, covering loss to cargo, ship, or freight.
· (c) Fire Insurance: Also an indemnity contract; insurer acquires rights after paying the claim.
· (d) General Insurance: Includes motor, burglary, and liability insurance—all indemnity-based; hence subrogation applies.