Multiple choice

Commercial Value of Life Insurance Policy implies that

  1. It can be used to increase sales

  2. It can be used as a collateral security to raise loans

  3. It can be used to decrease financial burden

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The commercial value of life insurance policy implies that it can be used as a collateral security to raise loans. It improves the continuity and credit-worthiness of business. A businessman can get a life policy on the life of his debtor to ensure repayment of his debt, or replacement of assets in the form of sinking fund policy.

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