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A contract is issued with a period of insurance coverage 1 July 202130 June 2022....

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Finance

A contract is issued with a period of insurance coverage 1 July 202130 June 2022. The contractually agreed premium is BD1,500. Insurance acquisition cash flows of BD250 are paid on 1 July 2021.

The premium is paid at different timing in the three scenarios:

(a) Scenario 1Premium paid up front.

(b) Scenario 2Premium paid at the end of the coverage period; and

(c) Scenario 3Premium paid on a monthly basis.

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