Which of the following is the correct calculation of insurance premium? a. (Premium/1,000) x table rate b. (Face value/1,000) x table rate c. (1000/Face value) x table rate d. ( Table rate/1,000) x Face value

Which of the following is the correct calculation of insurance premium? a. (Premium/1,000) x table rate b. (Face value/1,000) x table rate c. (1000/Face value) x table rate d. ( Table rate/1,000) x Face value

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 3SEQ

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Concept explainers

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.

Question

Which of the following is the correct calculation
of insurance premium?
a. (Premium/1,000) x table rate
b. (Face value/1,000) x table rate
c. (1000/Face value) x table rate
d. (Table rate/1,000) x Face value

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