There are two types of losses:
(1) Measurable: like ship, plane, car, house, etc.
and
(2) Immeasurable: such as life.

Measurable losses can be calculated on the basis of the cost declared by the owner himself. But the life or any organ of the body if lost accidentally can not be measured. To compensate the loss of the life, the person himself decides depending upon his standard of life, how much would be required for the survival of the family if he dies. This varies from person to person. An owner of the factory maintains a different life standard compared to a peon or a clerk. Both can claim 50 lakhs if they can afford to pay the premiums but it is not possible. They can claim what they pay in the premiums.

If a worker loses his hand or leg in an accident, to calculate the loss of his organ, we have to see how much he would earn after the accident and how much he would have earned if he had not met the accident. Also, it is to be calculated what other damages he would suffer due to the loss of the organ. Of course, the calculated amount is not the absolute compensation of the loss but it is not the fault of insurance. It is the inevitable part of the human life that one can not regain everything if he meets any misfortune. The insurance only helps in the best possible way to relieve him as well as his family from the current losses until he resettles and reshapes his life.