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Question
To provide funds to pay to the retiring partner or to the representatives of a deceased partner, generally partners create ________.
To provide funds to pay to the retiring partner or to the representatives of a deceased partner, generally partners create ________.
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Solution
The correct option is C joint life policy
A Joint Life Policy (JLP) is an insurance policy which is taken out by the partnership
firm on the joint lives of
all the partners. The amount of policy is
payable by the Insurance Company
either on the death or on maturity of policy, whichever is earlier. The firm pays annual premium to the
insurer against the policy.
The objective of creating Joint Life Policy is to minimize
financial hardships during the payment of a large sum of capital on the death
or retirement of a partner.
A Joint Life Policy (JLP) is an insurance policy which is taken out by the partnership firm on the joint lives of all the partners. The amount of policy is payable by the Insurance Company either on the death or on maturity of policy, whichever is earlier. The firm pays annual premium to the insurer against the policy.
The objective of creating Joint Life Policy is to minimize financial hardships during the payment of a large sum of capital on the death or retirement of a partner.
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