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Question
State whether the following statement is True or False:
An installment of money paid for insurance is called Premium
Options
True
False
Solution
True
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The value of insured property is called policy value
Property value = ₹ 12,50,000
Rate of premium, r = ₹ 3%
If property is fully insured, the policy value is same as property value therefore policy value = `square`
Premium = `"r"/100 xx "policy value"`
= `square/100 xx 12,50,000`
= `square`
