Raghubhai J.C. Monahan, age 40, bought a ordinary whole-life insurance policy for $210,000. Calculate her annual premium. (Use Table9.1.) If after 20 years J.C. no longer pays her premiums, what nonforfeiture options will be available to her? (Use Table 9.2.)Note: Round your annual premium answer to the nearest cent.Annual premiumNonforfeiture optionsOption 1:Option 2:Option 3:

Part 2:Explanation:Step 1: Calculation of Annual PremiumTo find the annual premium, we need to refer…

Answered: J.C. Monahan, age 40, bought a ordinary…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.20MCE

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Tommy Cook is 19 years old and is interested in purchasing a whole life insurance policy with a face value of $80,000. a. Calculate the annual insurance premium for this policy. Note: Refer to the tables in the text for input data. Face value= Number of $1,000 = Rate per $1,000 = (whole life insurance, male -19) Annual premium = b. Calculate the monthly insurance premiums. Monthly percent Monthly premium = c. How much more will Tommy pay per year if he chooses monthly payments? Total of monthly payments = If paid monthly = More will be paid
The Real Deal Life Insurance company is offering to you to purchase a policy that will pay you, your children, your grandchildren, and all your heirs $ 37, 000 every year forever. The required return on this policy is 6.3 percent. What is the maximum amount of money that you should be willing to pay for this policy? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)
Darlene wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10-year policy? a $100 b. $108 C$1.202 d. $1.290
Suppose a life insurance company sells a $230,000 one-year term life insurance policy to a 24-year-old female for $240. The probability that the female survives the year is 0.999514. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ (Round to two decimal places as needed.)
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $50,000 today or receive payments of $641 a month for 10 years. You can earn 6.50% on your money. What option should you take and why?
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. You can earn 6 percent on your money. Which option should you take and why?
Calculate the life insurance gross premium for an insurance company, XYZ Life, under the following assumptions. Please round your answer to the nearest dollar. 1-year term insurance for a 35-year-old female • The death benefit is $10,00O • The probability of death within one year given a female is 35 years old (q30) is 0.015 The interest rate is 1.5% • All deaths occur uniformly, hence for simplicity, price the product assuming all deaths happen at the middle of the year • XYZ Life is looking for a 25% loading based on the pure premium (i.e. PV of expected loss) (Hint: When loading Ap, expressed as a percentage, is based on pure premium, Gross premium = Pure premium × [1 + Ap]) Choose the correct answer from below. $166 $171 $149 $155 O $186
You are considering two insurance settlement offers. The first offer includes annual payments of $45,000 a year for 12 years with the first payment made at the beginning of the year. The other offer is the payment of one lump sum amount at the beginning of the year. You are trying to decide which offer to accept given the fact that your discount rate is 7%. What is the mininum amount that you will accept if you are to select the lump sum offer? • A. $540,000.00 • в. $357,420.88 • C. $412,738.96 • D. $382,440.35 • E. $437,358.40
As the beneficiary of a life insurance policy, you have two options for receiving the insurance proceeds. You can receive a lump sum of $200,000 today or receive payments of $1,400 a month for 20 years. If you can earn 6 % annual rate on your money, which option should you take and why? Group of answer choices You should accept the payments because they are worth $336,000 to you today. You should accept the payments because they are worth $247,800 to you today. You should accept the $200,000 because the payments are only worth $189,311 to you today. You should accept the payments because they are worth $209,414 to you today. You should accept the $200,000 because the payments are only worth $195,413 to you today.
If Yolanda's insurance company cancels her fire insurance policy after 204 days, how much of the $682.00 annual premium will she receive as a refund (in $)? (Round you answer to the nearest cent.) $
You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $400,000 today or receive payments of $16,000 a year for 15 years. You can earn 6 percent on your money. Which option should you take and why?
Use the given table. Parker's $250,000 whole-life insurance policy has a cash value of $11,286. Parker is 60 years old, female, smokes, and is converting to an extended term policy for the same face value. Use 10-year level term rates to estimate the number of years of extended term insurance she has. Click the icon to view the data table. Parker has years of extended term insurance. (Do not round until the final answer. Then round to two decimal places as needed.)

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