Question

Find the premium on property worth Rs.1250000 at Rs.3% i) the property is fully insured ii) the property is insured to the extent of 60% of its value
*​

Answer 1

Step-by-step explanation:

Solution:

Given, property value = ` 12,50,000,

rate of premium = 3%

i. When property is fully insured,

Here, property value = policy value

 Policy value = ` 12,50,000

Now, amount of premium = 3% of policy value

=

3

100

 12,50,000

= ` 37,500

 amount of premium is ` 37,500.

ii. When property is insured to 80% of it’s value.

Here, policy value = 80% of property value

=

80

100

 12,50,000

= ` 10,00,000

Now, amount of premium = 3% of policy value

=

3

100

 10,00,000

= ` 30,000

 amount of premium is ` 30,000

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