Question

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 Value for the dead partner and Surrender Value for the rest
• D. Surrender Value for all the partners

Answer 1

The correct option is A Policy Amount

A partnership firm may decide to take a joint life insurance policy on the lives of all the partners. The firm pays the premium and the amount of policy is payble to the firm on the death or maturity of the policy, whichever is earlier. The objective is to minimize financial hardships during the payment of a large sum of capital on the death of a partner.

In case of a death, the firm receives full amount of policy.