4. Consider a 20-year term insurance issued to a select life aged 40 by a single premium, with sum insured $500,000 payable immediately on death. Assume mortality follows the Standard Select Life Table, with UDD between integer ages, and assume an interest rate of 5% per year. Calculate the net single premium.

4. Consider a 20-year term insurance issued to a select life aged 40 by a single premium, with sum insured $500,000 payable immediately on death. Assume mortality follows the Standard Select Life Table, with UDD between integer ages, and assume an interest rate of 5% per year. Calculate the net single premium.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

Property Insurance

Property insurance protects property from unforeseeable loss or damage and covers property owners' liability. Property insurance provides financial compensation to the property owner or renter in the event of damage or theft, as well as to someone other than the owner or renter if that person is injured on the property. Property insurance covers all risks of damage caused by theft, fire, flood, cyclones, lighting, and natural calamities, among other things. The primary goal of property insurance is to require the property owner to cover the loss. A monthly premium is paid to the insurance company, and in exchange, the insurance company pays for damage based on the agreement stated in the policy. Property insurance protects assets such as a vehicle, auto, car, rental home, house, and valuable property.

Question

4. Consider a 20-year term insurance issued to a select life aged 40 by a single premium, with
sum insured $500,000 payable immediately on death. Assume mortality follows the Standard
Select Life Table, with UDD between integer ages, and assume an interest rate of 5% per year.
Calculate the net single premium.

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An insurer needs to make the following annuity payments to an individual: £744 paid at the beginning of each year for the first 5 years and then £654 paid at the beginning of each month for the next 5 years and then £798 paid at the beginning of each quarter for the following 8 years. Assuming a nominal rate of interest of 2.7% pa convertible quarterly throughout the entire period, how much total fund the insurer needs to hold today in order to meet these payments? Express your answer in £s to 2 decimal places.
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Find the term of the following ordinary general annuity. State your answer in years and months (from 0 to 11 months). Payment Interval Present Periodic Interest Compounding Period Value Payment Rate $9300 $355 month 7% quarterly The term of the annuity is year(s) and month(s).
An insurer needs to make the following annuity payments to an individual: £744 paid at the beginning of each year for the first 5 years and then £654 paid at the beginning of each month for the next 5 years and then £798 paid at the beginning of each quarter for the following 8 years. Assuming a nominal rate of interest of 2.7% pa convertible quarterly throughout the entire period, how much total fund the insurer needs to hold today in order to meet these payments? Express your answer in £s to 2 decimal places. (correct answer: 53269.67) (need working out)
A student wants save for college which begins in four years. How much will the student save assuming equal deposits of $2,000 at the beginning of each year and 5% interest? Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Future value of annuity due $1 Future Value of ordinary annuity of $1 5%/4 3.72325 3.54595 4.52563 4.31013 Required Computation:
Using Table 19-1 and Table 19-2, calculate the annual, semiannual, quarterly, and monthly premiums (in $) for the life insurance policy. Round your answers to the nearest cent. Age 18 19 20 21 22 Face Value of Policy 23 24 25 26 27 28 29 30 TABLE 19-1 Annual Life Insurance Premiums (per $1,000 of Face Value) 35 40 $45,000 45 50 55 60 5-Year Term Male $2.32 2.38 243 2.49 2.55 2.62 32.69 2.77 2.84 2.90 2.98 3.07 3.14 Sex and Age of Insured 3.43 4.23 6.12 9.72 16.25 24.10 Term Insurance Female $ 1.90 1.96 2.07 2.15 2.22 2.30 2.37 2.45 2.51 2.58 male-50 2.64 2.70 2.78 2.92 3.90 5.18 8.73 12.82 19.43 10-Year Term 4.57 4.64 4.70 4.79 4.85 Male Female $4.33 $4.01 4.42 4.12 4.49 4.20 4.92 5.11 5.18 5.23 5.30 Type of Policy 6.42 7.14 8.81 14.19 22.03 37.70 20-payment life 4.29 4.36 4.42 4.47 4.51 4.60 4.69 4.77 4.84 4.93 5.35 6.24 7.40 9.11 13.17 24.82 Whole Life Male Female $11.17 $13.22 13.60 11.68 14.12 12.09 14.53 14.97 15.39 15.90 16.38 16.91 17.27 17.76 18.12 18.54 24.19 27.21 33.02 37.94…
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