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At the time of retirement of a partner, firm gets ……… from the insurance company against the Joint Life Policy taken severely for each partner.
- a)Policy Amount.
- b)Surrender Value.
- c)Policy Value for the retiring partner and Surrender Value for the rest.
- d)Surrender Value for all the partners.
Correct answer is option 'D'. Can you explain this answer?
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At the time of retirement of a partner, firm gets ……&hel...
Explanation:
When a partner retires from a firm, the firm may have taken a Joint Life Policy for each partner. This policy is typically an insurance policy that covers the lives of multiple partners in the firm. Upon retirement of a partner, the firm receives a certain amount from the insurance company.
The correct answer is option D: Surrender Value for all the partners.
Here is a detailed explanation:
Policy Amount:
- The policy amount refers to the total sum assured by the insurance company in case of the death of any of the insured partners.
- It is not applicable in the context of retirement of a partner.
Surrender Value:
- Surrender value is the amount that the insurance company pays to the policyholder if they decide to terminate the policy before its maturity date.
- It is not directly related to the retirement of a partner.
Policy Value for the retiring partner and Surrender Value for the rest:
- This option suggests that the retiring partner receives the policy value, while the remaining partners receive the surrender value.
- However, in reality, the firm receives a single payout from the insurance company, which is the surrender value for all the partners collectively.
Surrender Value for all the partners:
- When a partner retires, the firm receives the surrender value from the insurance company.
- This surrender value is calculated based on the premiums paid and the policy terms.
- The surrender value is then distributed among all the partners, including the retiring partner, according to the partnership agreement.
In conclusion, when a partner retires, the firm receives the surrender value from the insurance company, which is then distributed among all the partners, including the retiring partner. Option D is the correct answer.
When a partner retires from a firm, the firm may have taken a Joint Life Policy for each partner. This policy is typically an insurance policy that covers the lives of multiple partners in the firm. Upon retirement of a partner, the firm receives a certain amount from the insurance company.
The correct answer is option D: Surrender Value for all the partners.
Here is a detailed explanation:
Policy Amount:
- The policy amount refers to the total sum assured by the insurance company in case of the death of any of the insured partners.
- It is not applicable in the context of retirement of a partner.
Surrender Value:
- Surrender value is the amount that the insurance company pays to the policyholder if they decide to terminate the policy before its maturity date.
- It is not directly related to the retirement of a partner.
Policy Value for the retiring partner and Surrender Value for the rest:
- This option suggests that the retiring partner receives the policy value, while the remaining partners receive the surrender value.
- However, in reality, the firm receives a single payout from the insurance company, which is the surrender value for all the partners collectively.
Surrender Value for all the partners:
- When a partner retires, the firm receives the surrender value from the insurance company.
- This surrender value is calculated based on the premiums paid and the policy terms.
- The surrender value is then distributed among all the partners, including the retiring partner, according to the partnership agreement.
In conclusion, when a partner retires, the firm receives the surrender value from the insurance company, which is then distributed among all the partners, including the retiring partner. Option D is the correct answer.
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At the time of retirement of a partner, firm gets ……… from the insurance company against the Joint Life Policy taken severely for each partner.a)Policy Amount.b)Surrender Value.c)Policy Value for the retiring partner and Surrender Value for the rest.d)Surrender Value for all the partners.Correct answer is option 'D'. Can you explain this answer?
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