Question

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
a) $0
b) $200
c) $9,800
d) $10,000

Answer 1

Answer:

C) $9,800

Explanation:

Sum Insured= $10,000

Premium Payable= $200

Due Date of Premium= 1st February

Death of Insured occurred on=28 February

As the death occurred after date of premium so our answer will be as follows

Net receivable =Sum insured-Premium payable by insured

net receivable=$10,000-$200

Net Receivable=$9,800