Detailed Answer
(b) When a company insures the lives of employees and
names itself as the beneficiary, the cash surrender value (CSV) of
the policy is considered an asset. Premiums paid are debited to
CSV for the increase in CSV that year and to insurance expense
for the excess of cash paid over increase in CSV. Upon the death
of the insured employee, the company recognizes a gain for the
excess of proceeds received over CSV.