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How do you calculate profit or loss on surrender value of joint life policy?
Wiki User
∙ 10y ago
Add up the amount of money paid into the policy since policy application or inception. Subtract from that amount the "surrender value". If the total is a positive number, that is the amount of your profit. If the total is a negative number, that is the amount of your loss. If you have a profit, the profit is taxable. If you don't surrender the policy and the policy pays a death benefit, the death benefit is typically not taxable.
Wiki User
∙ 10y ago
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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 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.
In joint life annuity one person dies does survivor get lump sum?
No, not unless the survivor asked to surrender the policy. If the survivor wants a lump sum, it is available.
What is the Virginia Companys goal?
As a joint stock company profit was the goal.
When one spouse dies in a joint policy and no beneficiary is named do the proceeds default to the joint spouse that has survived?
Yes
Why did people joint stock companies?
if the company achieved the profit, each shareholder would recieve a portion of that profit, based on the number of shares owned.
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.
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.
Why did people form joint stock-companies?
if the company achieved the profit, each shareholder would recieve a portion of that profit, based on the number of shares owned.
What was Virginia Company chartered by King James I in 1606?
As a joint stock company profit was the goal.
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...........
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,
