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The balance of joint life policy account as shown in the balance sheet represents:
- a)Surrender value of a policy
- b)Annual premium of JLP
- c)Total premium paid by the firm
- d)Amount receivable on the maturity of the policy
Correct answer is option 'A'. Can you explain this answer?
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The balance of joint life policy account as shown in the balance sheet...
Balance of joint life policy account represents surrender value of a policy
Explanation:
Joint life policy is an insurance policy that covers the lives of two individuals. The policy pays out on the death of the first person, and then ceases to exist. The balance of joint life policy account as shown in the balance sheet represents the surrender value of a policy.
Surrender value is the amount payable to the policyholder when the policy is surrendered before maturity. Surrendering a policy means terminating the policy prematurely and receiving the cash value of the policy. The surrender value is calculated based on the premiums paid and the duration of the policy.
The balance of joint life policy account represents the amount of money that the insurance company has set aside to pay out the surrender value of the policy. This amount is included in the balance sheet as an asset of the company.
The other options listed in the question, such as annual premium, total premium paid by the firm, and amount receivable on the maturity of the policy, are not relevant to the balance of joint life policy account. The balance of joint life policy account only represents the surrender value of the policy.
In summary, the balance of joint life policy account as shown in the balance sheet represents the amount of money set aside by the insurance company to pay out the surrender value of a joint life policy.
Explanation:
Joint life policy is an insurance policy that covers the lives of two individuals. The policy pays out on the death of the first person, and then ceases to exist. The balance of joint life policy account as shown in the balance sheet represents the surrender value of a policy.
Surrender value is the amount payable to the policyholder when the policy is surrendered before maturity. Surrendering a policy means terminating the policy prematurely and receiving the cash value of the policy. The surrender value is calculated based on the premiums paid and the duration of the policy.
The balance of joint life policy account represents the amount of money that the insurance company has set aside to pay out the surrender value of the policy. This amount is included in the balance sheet as an asset of the company.
The other options listed in the question, such as annual premium, total premium paid by the firm, and amount receivable on the maturity of the policy, are not relevant to the balance of joint life policy account. The balance of joint life policy account only represents the surrender value of the policy.
In summary, the balance of joint life policy account as shown in the balance sheet represents the amount of money set aside by the insurance company to pay out the surrender value of a joint life policy.
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The balance of joint life policy account as shown in the balance sheet...
A- Surrender value of a policy
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The balance of joint life policy account as shown in the balance sheet represents:a)Surrender value of a policyb)Annual premium of JLPc)Total premium paid by the firmd)Amount receivable on the maturity of the policyCorrect answer is option 'A'. Can you explain this answer?
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