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Are insurance premiums a fixed cost ?

Are insurance premiums a fixed cost ?

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Question added by Murtuza Lalbaugwala , Associate Auditor
Date Posted: 2013/06/16
Md Jiyaul Abdula
by Md Jiyaul Abdula , Senior Project Accountant , Gate City Trading and Contracting

The cost of the insurance premiums for a company’s property insurance is likely to be a fixed cost. The cost of worker compensation insurance is likely to be a variable cost. Whether a cost is a fixed cost, a variable cost, or a mixed cost depends on the independent variable.

JOHN MARTIN
by JOHN MARTIN , DEVELOPMENT OFFICER , THE NEW INDIA ASSURANCE COMPANY LIMITED

For Corporates - Insurance premium towards, property, assets, stocks etc are fixed costs.

For individuals - Insurance premium towards, mediclaim, accident and life can be considered as fixed costs.

Prince Ninan
by Prince Ninan , Audit Executive , Lewis & Pecker

In most of the cases yes, exception for eg group life insurance

Deleted user
by Deleted user

Fixed to customers only Nice question

Naveed Ahmad
by Naveed Ahmad , Head of Accounting and Finance and Head of Internal Audit positions , Al Fardan group

Mostly yes it could be considered as fixed cost as it relates to value of fixed assets however, insurance premiums relating to shipments in case company bear the cost deliver the item to buyers location and incure insurance changes then it would be considered as variable cost as well.  In case company provides medical insurance to employees, the cost would be linked with the number of employes hence we could consider this as variable cost.  So it depnds on the nature and cercumstances of the event which decides whether insurance premium is to be considered as a fixed or varibale cost.

Mostafa Naguib Mehassab Ahmed
by Mostafa Naguib Mehassab Ahmed , Senior Accountant , AMANAH Technology

Yes

mukkur srinivasan varadhan
by mukkur srinivasan varadhan , Chartered Accountant , Chartered Accountant in practice

No,it will vary as per volume of sales activity.We can say semi variable.

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