Multiple choice

Which of the following statements is incorrect?

  1. Premium for an MRP as a collateral for a bank loan need not be paid as the bank is expected to pay the same.

  2. Keyman life policy can compensate for losses incurred due to stoppage of work, following the absence of the keyman from work.

  3. Keyman life policy proceeds can be set off against lost income from lost business.

  4. Keyman can provide compensation to protect profits.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Keyman insurance helps a business recover from the loss of its valuable assets viz. the persons who run it and/or own it. Individual talents are becoming critical to the success of many companies and employees are also becoming an important factor in investors' valuation of the entities. Every business has at least a few very valuable employees who contribute significantly to the running and growth of the company.

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