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A Joint Life Policy is an assurance policy taken on the joint lives of the partners. On the death of a partner, the firm becomes liable to pay the executors of deceased partner his capital, interest on capital, his share of profit from the closing of the previous year to the date of death and his share of reserves, goodwill etc. The total amount thus becoming due to the executors is usually significant and immediate payment of such heavy amount out of firm's resources is likely to affect firm's finances very adversely.
The above problem can be tackled if the firm takes policy on the lives of all the partners jointly from the Life Insurance Corporation of India. According to the firms of the policy, the premium is paid, periodically by the firm to the L. I. C. of India who undertakes to pay the sum assured to the firm either on the death of any partner or on the maturity of the policy whichever is earlier. The amount received is credited to all the partners including the deceased in their profit sharing ratio, while the amount received enables the firm to make the payment to the executors without affecting adversely the financial position of the firm.
By
Manivasagan Radhakrishnan
SAP FI CO Consultant
94422 48732
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∙ 14y ago
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Joint and survivor life income option?
When you have partnership in a business. You can use that kind of option in which means: both are in a coverage under a policy that stipulate no benefits will be paid up to, both, die. And the beneficiaries will receive the benefit to pay business expenses.
What is a Joint Life Annuity?
Both husband and wife can be Joint Annuitants in a Pension Policy, where annuities are shared at proportion mutually agreed upon between them.
Can variable universal life insurance be converted into a fixed account?
Variable universal life insurance is not an account. It is a policy that invests in separate accounts in an attempt to earn higher returns than a fixed policy. A variable universal life insurance policy can be converted into a different type of life insurance policy but not a different kind of account.
What are classes of partnership?
like business , we can give many other examples in our life which we are the classes of partnership
Is Partnership comes to an end when a partner resign from partnership?
Partnership has a limited span of life, so if one partner will resign the partnership will be dissolved.There will be some changes or adjustments to be made by the remaining partners.
What is joint life insurance policy Describe the accounting treatment of joint life policy upon death of a partner?
Joint life policy is an policy taken by all the partners of the partnership firm for avoiding the disturbance in business due to death or retirement of partners,so when a partner dies insurance company will pay the representatives of the deceased partner otherwise the assets would have to be sold which can led to disturbance of business.thus,JLP is taken...........
Joint and survivor life income option?
When you have partnership in a business. You can use that kind of option in which means: both are in a coverage under a policy that stipulate no benefits will be paid up to, both, die. And the beneficiaries will receive the benefit to pay business expenses.
How good is joint life insurance, and how much is it?
Joint life insurance basically insures two people with one policy. Joint life insurance policies exercise more leniency, making it easier to get life insurance. Premiums are also usually lower than if you were to buy two separate policies.
What is the tretment of Joint life policy premium?
A partnership firm may decide to take a Joint Life Policy on the lives of all partners. The firm pays the premium and the amount of policy is payable to the firm on the death of any partner or on the maturity of policy whichever is earlier. The objective of taking such a policy is to minimise the financial hardships to the event of payment of a large sum to the legal representatives of a deceased partner or to the retiring partner.The accounting treatment for the premium paid and the joint life policy may be on any of the following ways:1. When premium paid is treated as an expense:- When premium paid is treated as an expense the it is closed every year by transferring to profit and loss account. In this case complete amount received from the insurance company either on a surrender of policy or on the death of the partner becomes a gain.Accounting entries are:a. On payment of premiumJoint Life Policy insurance premium a/c ...DrTo Bank A/cb. On Charging to profit and loss accountProfit and Loss account ...DrTo Joint Life Policy insurance premium a/cc. On the maturity of the policyInsurance company/ bank a/c ...DrTo partner's capital a/c (individually){including the a/c of representative of deceased partner}2. When premium paid is treated as an asset:- In this case insurance premium paid is first debited to life policy a/c and credited to bank a/c. At the end of the year the amount in excess of surrender value is treated as a loss and is transferred to profit and loss a/c. In this case the amount received from the insurance company inn excess of the surrender value results in a gain at the time of receipt of such amount which is transferred to Capital accounts of the partners in the profit sharing ratio.3. Creation of Joint Life Policy:- Under this method, premium paid is debited to policy account and credited to bank a/c. At the end of the year, amount equal to premium is transferred from Profit and Loss Appropriation account to Policy reserve account. After this, policy account is brought down to its surrender value by debiting the life policy reserve account with amount which exceeds the surrender value of the policy. Thus, in this method, policy account appears on the asset side and policy reserve account appears on the liabilities side of the balance sheet until it is realised. This method is different from the method discussed in 2 only in respect of reserve account.On the death of a partner Joint Life Policy Reserve Account is transferred to Joint Life Policy account and then the balance is transferred to Partner's capital accounts.
What is a 'joint survivor' universal life insurance policy?
It it is like, your hip or elbow or your knee...whatever joint survives the crash.
Which is the correct comparison between survivor ship life and a traditional joint life policy?
Joint life pays a death benefit on the first death, while survivorship life pays on the las death.
How many title types of ownership are there in real estate?
Tenancy in common; joint tenancy; tenancy by the entirety; tenancy in partnership; life tenancy.
What is the probate law in South Carolina on joint bank accounts?
there is only certain things that probate law covers and joint bank accounts are not one. Non-probate property includes, among other things, jointly owned bank accounts, life insurance and pension benefits.
What is surrender value in accounting in joint life policy?
it is an amount paid by insurance company to person who has voluntarily terminate his policy before maturity
What is a Joint Life Annuity?
Both husband and wife can be Joint Annuitants in a Pension Policy, where annuities are shared at proportion mutually agreed upon between them.
How can I cancel joint life insurance when one party doesn't consent?
This will depend on some factors. Who is the policy-owner? The policy-owner is the only person who can cancel the insurance policy,
When is the face amount paid under a Joint life and Survivor policy?
Upon death of the first insured
