ECONOMICS (CBSE/UGC NET)

ECONOMICS

INSURANCE

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

What is another name for the payments which must be made to the insurance company in order to have coverage?

A	Premium
B	Deductible
C	Liability
D	Benefit

Explanation:

Detailed explanation-1: -The amount of money charged by the insurer to the policyholder for the coverage set forth in the insurance policy is called the premium.

Detailed explanation-2: -Premium-The amount paid by an insured to an insurance company to obtain or maintain an insurance policy.

Detailed explanation-3: -An insurance premium is an amount that every insurance policyholder has to pay; in return for which, the insurers provide coverage against the losses as per the policy. When an insurance policyholder stops paying his/her insurance premium, he/she indirectly risk the cancellation of the policy.

Detailed explanation-4: -An advance premium fund exists when insurance companies who receive advance premiums must account for the unearned portion of these premiums as a separate liability item on their balance sheets. Once the premium is earned, it is run through the income statement.

There is 1 question to complete.