Advertisements
Advertisements
Question
The rate of premium is 2% and other expenses are 0.75%. A cargo worth ₹ 3,50,100 is to be insured so that all its value and the cost of insurance will be recovered in the event of total loss.
Solution
Property value = 3,50,100
Let insured value = a.
∴ premium = `(2"a")/100`
Other expenses = 0.75% of a
`= (75 "a")/(10,000)`
∴ Insured value = Property value + Premium + Other expenses
∴ a = 3,50,100 + `(2"a")/100 + (75 "a")/(10,000)`
∴ a = 3,50,100 + `(2"a" xx 100)/(100 xx 100) + (75 "a")/(10,000)` ....(Multiplied by 100)
∴ a = 3,50,100 + `(200"a")/10000 + (75 "a")/(10,000)`
∴ a = 3,50,100 + `(275 "a")/(10,000)`
∴ a - `(275 "a")/(10,000)` = 3,50,100
∴ `(10,000 "a" - 275 "a")/(10,000) = 3,50,100`
∴ `(9,725 "a")/(10,000)` = 3,50,100
∴ a = `3,50,100 xx (10,000)/(9,725)`
∴ a = 3,60,000
APPEARS IN
RELATED QUESTIONS
Define Life Insurance.
Principles of Insurance?
State Whether the Following Statement Are True Or False (Give Reason)
Principles of utmost good faith is only applicable to life insurance contract.
Distinguish between the following:
Fire Insurance & Marine Insurance
Answer the following question:
Define insurance. Explain the various principles of insurance.
Explain briefly the principles of insurance with suitable examples?
A shop is valued at ₹3,60,000 for 75% of its value. If the rate of premium is 0.9%, find the premium paid by the owner of the shop. Also, find the agents commission if the agent gets commission at 15% of the premium.
A car valued at ₹8,00,000 is insured for ₹5,00,000. The rate of premium is 5% less 20%. How much will the owner bear including the premium if value of the car is reduced to 60 % of its original value.
A person takes a life policy for ₹2,00,000 for a period of 20 years. He pays premium for 10 years during which bonus was declared at an average rate of ₹20 per year per thousand. Find the paid up value of the policy if he discontinues paying premium after 10 years.
Choose the correct alternative :
“A contract that pledges payment of an agreed upon amount to the person (or his/ her nominee) on the happening of an event covered against” is technically known as
Choose the correct alternative :
Following are different types of insurance.
I. Life insurance
II. Health insurance
III. Liability insurance
Fill in the blank :
The proportion of property value to insured value is called __________.
State whether the following is True or False :
Premium is the amount paid to the insurance company every month.
Solve the following :
A 35-year old person takes a policy for ₹1,00,000 for a period of 20 years. The rate of premium is ₹76 and the average rate of bonus is ₹7 per thousand p.a. If he dies after paying 10 annual premiums, what amount will his nominee receive?
Solve the following :
For what amount should a cargo worth ₹25,350 be insured so that in the event of total loss, its value as well as the cost of insurance may be recovered when the rate of premium is 2.5 %.
State whether the following statement is True or False:
An installment of money paid for insurance is called Premium
State whether the following statement is True or False:
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`
Policy value = ₹ 80,000
Period of policy = 20 years
Amount of money paid in 10 years = `square`
Annualized average rate per bonus = ₹ 20 per thousand per year
For one year, bonus = `square/1000 xx 80,000`
= ₹ 1,600
Bonus for 10 years = `10 xx square`
= ₹ 16,000
Total amount after 10 years = `square + 16000`
= ₹ `square`
