Question

On death of a partner, the firm gets for joint life policy taken for all partners:

• A. Policy amount
• B. Surrender value
• C. Policy amount of deceased partner
• D. Surrender value of all partners

Hint:

Remember: On death claim, full policy amount is received; surrender value applies only on discontinuation.

Answer 1

The Correct Option is A

Step 1: Nature of Joint Life Policy.
A joint life policy (JLP) is taken jointly on the lives of all partners. On death of any one partner, the insurance company pays the full policy amount to the firm.
Step 2: Why not surrender value?
Surrender value is relevant only if the policy is discontinued before maturity. On actual death, the full policy amount is received.
Step 3: Conclude.
Hence, the firm receives the full policy amount.
Final Answer: \[ \boxed{\text{Policy amount}} \]