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At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partners
- a)Policy Amount
- b)Surrender Value
- c)Policy amount or surrender value which ever is higher
- d)Policy amount or surrender value which ever is lower
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
At the time of death of a partner, firm gets ________ from the insuran...
Joint Life Policy:
To provide funds to pay to the representatives of a deceased partner, without upsetting the working capital of the firm, it is usual to take out a joint policy on the lives of the partners. The insurance company undertakes to pay a fixed sum of money when any of the partners dies.
There are two ways to deal with this in the account. Either, all the premiums paid are treated as expenses and debited to Profit and Loss Account and, when a partner dies, the amount received from the insurers is treated as a profit and credited to all partners in the profit.-sharing ratio. If during the currency of the policy, a new partner is admitted or a partner retires, it would be necessary to raise in the books the surrender value of the policy. This would be profit like any other profit on revaluation.
Most Upvoted Answer
At the time of death of a partner, firm gets ________ from the insuran...
Answer:
Joint Life Policy and Death of a Partner
When partners take a Joint Life Policy, the policy covers all the partners of the firm. The policy is taken to safeguard the interest of the firm in case of the death of any of the partners. The death of a partner can be a huge financial burden on the firm, and the Joint Life Policy helps in mitigating this burden.
Insurance Claim
When a partner dies during the term of the Joint Life Policy, the firm can claim the Policy Amount from the insurance company. This Policy Amount is the sum assured under the policy, and it is paid to the firm as a lump sum amount.
Surrender Value
Surrender Value is the amount payable by the insurance company to the policyholder if the policy is surrendered before maturity. The insurance company calculates the Surrender Value based on the number of premiums paid and the duration of the policy. The Surrender Value is always lower than the Policy Amount.
Policy Amount or Surrender Value
In case of the death of a partner, the firm can claim the Policy Amount or Surrender Value, whichever is higher. However, in the case of a Joint Life Policy, the Surrender Value is always lower than the Policy Amount. Hence, the firm gets the Policy Amount from the insurance company.
Conclusion
In conclusion, when a partner dies during the term of a Joint Life Policy, the firm can claim the Policy Amount from the insurance company. The firm cannot claim the Surrender Value in such a situation.
Joint Life Policy and Death of a Partner
When partners take a Joint Life Policy, the policy covers all the partners of the firm. The policy is taken to safeguard the interest of the firm in case of the death of any of the partners. The death of a partner can be a huge financial burden on the firm, and the Joint Life Policy helps in mitigating this burden.
Insurance Claim
When a partner dies during the term of the Joint Life Policy, the firm can claim the Policy Amount from the insurance company. This Policy Amount is the sum assured under the policy, and it is paid to the firm as a lump sum amount.
Surrender Value
Surrender Value is the amount payable by the insurance company to the policyholder if the policy is surrendered before maturity. The insurance company calculates the Surrender Value based on the number of premiums paid and the duration of the policy. The Surrender Value is always lower than the Policy Amount.
Policy Amount or Surrender Value
In case of the death of a partner, the firm can claim the Policy Amount or Surrender Value, whichever is higher. However, in the case of a Joint Life Policy, the Surrender Value is always lower than the Policy Amount. Hence, the firm gets the Policy Amount from the insurance company.
Conclusion
In conclusion, when a partner dies during the term of a Joint Life Policy, the firm can claim the Policy Amount from the insurance company. The firm cannot claim the Surrender Value in such a situation.
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At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer?
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At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer?.
At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer?.
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At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of At the time of death of a partner, firm gets ________ from the insurance company against the Joint Life Policy taken jointly for all the partnersa)Policy Amountb)Surrender Valuec)Policy amount or surrender value which ever is higherd)Policy amount or surrender value which ever is lowerCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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