A special endowment assurance policy is issued to a male aged 55 and afemale aged 50 with a term of 20 years. A benefit of $500,000 is payableimmediately on the last death of the two lives. There is a survival benefit of$600,000 if both of them are alive; if only one of them is alive, the survivalbenefit is $400,000. Premiums are payable annually in advance over the termof the policy as long as one of them is alive. The interest rate is 4% perannum and the mortality basis is PA92C20. Calculate the net annualpremium for this policy. Correct your answer to the nearest cent.

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Answered: A special endowment assurance policy is…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 24CE: Leland pays premiums of 5,000 for an insurance policy in the face amount of 25,000 upon the life of...

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The will of Don José Luis, who has just died, specifies that the beneficiary of his 15,000,000.00 insurance be invested at 24%, compounded monthly, and that his widow receives 250,000.00 a month from said amount, for the rest of his life . Making the first payment immediately and the last on the same date of his death. The will also establishes that the surplus is donated to the University where the study for scholarships. If his wife dies 7 years later, how much will the University receive on that same date.
A fully discrete 30-year endowment insurance policy of 400,000 is sold to Jenna who is 50 years old. The endowment policy contains an option where the endowment benefit at the end of 30 years can be taken as a whole life annuity due, with a 10-year guarantee, payable monthly from age 80, based on the same pricing assumptions as for the endowment insurance. You are given that: − The actuarial present value of the monthly payments at age 80 is equal to the amount of the endowment. − Monthly annuities are calculated using the two-term Woolhouse formula. − Mortality follows the Standard Ultimate Life Table with ? = 0.05. Calculate the amount of the monthly payment.
Mr. Larsen's will directed that $209.000 be invested to establish a perpetuity making payments at the end of each month to his wife for as long as she lives and subsequently to the Canadian Heart Foundation. What will the payments be if the funds can be invested to eam 6.0% compounded monthly? Monthly payments will be
A select life aged 60 purchases a 10-year endowment insurance with $100,000 sum insured. Premiums are payable annually in advance and death benefits are payable at the end of the year of death. Assume that (i) commission is 10% of the first premium and 4% of each subsequent premium, (ii) other expenses are $50 at issue, and $5 at each subsequent premium date, (iii) mortality follows the Standard Select Life Table, and (iv) interest is 5% per year. Calculate the annual premium.
A family wishes to accumulate 50,000 in a college education fund at the end of 20 years. If they deposit 1,000 in the fund at the end of each of the first 10 years and 1,000+ X in the fund at the end of each of the second 10 years, find X if the fund earns 8% effective.
Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10% compound interest. How much cash must Mia deposit on January 1, year 1, to provide the five equal annual year-end cash payments from the fund?
You wish to build an independent fund for your retirement planned for your 65th birthday. On your 30th birthday, you will make the first monthly contribution of $200 into the fund that will earn 6%/year compounded annually. You will make your last payment into the fund on your 65th birthday. At age 65, when you retire, you have decided to opt for 30 years of equal bi-weekly payments (one payment every two weeks) from the fund with the first payment starting two weeks after your 65th birthday. How large will each payment be, assuming the fund will still be earning 6%/year compounded annually?
Carl is the beneficiary of a $ 20,000 trust fund set up for him by his grandparents. Under the terms of the trust, he is to receive the money over a 5-year period in equal installments at the end of each year. If the fund earns interest at the rate of 5%/year compounded annually, what amount will he receive each year? (Round your answer to the nearest cent.) $
At age 60, a man established a trust fund of R20 000 which will pay his family a regular amount at the end of each month for 12 years after his death. If he dies at age 65, what monthly sum will the family receive if the fund earns 3% p.a. compounded monthly and if the first payment will be made 1 month after his death?
A generous benefactor to DePaul plans to make a one-time endowment which would generate $15,000 of income each year into perpetuity. The rate of interest is expected to be 5 percent for all future time periods. How large must the endowment gift be? (Please show work)
Ms. Anna Ang, aged 39, recently purchased an endowment plan from an insurer that requires her to set aside $24,000 per year for the next 23 years till she retires at age 62. The first premium payment occurs at the beginning of the period. Assuming an inflation rate of 2% and an estimated rate of return of 4.0% from the endowment plan, what is the estimated future value of Anna’s regular savings at age 62?
Mike wants to donate $5,000,000 to establish a fund to provide an annual scholarship in perpetuity. The fund will earn an interest rate of 4.47% p.a. compounded half-yearly (2=4.47% p.a.) and the first scholarship will be first awarded 3.5 years after the date of the donation. (b) Assume that two years after the donation, Mike needs to withdraw $1,000,000 from the fund and use the remaining amount to provide an annual scholarship in perpetuity. The time of the first scholarship will be unchanged (3.5 years after the date of the donation). What is the new annual scholarship amount (rounded to two decimal places)? a. 101959.37 O b. 206197.54 O c. 203631.53 O d. 207511.86

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