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rchases the policy with a 180-day elimination period, how much will they receive as a benefit in his first year in a e facility (assume an annual cost of $91,440? if the annual cost does not increase, how much will they receive in the second year? S

rchases the policy with a 180-day elimination period, how much will they receive as a benefit in his first year in a e facility (assume an annual cost of $91,440? if the annual cost does not increase, how much will they receive in the second year? S

Essentials Of Investments
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
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If Steven purchases the policy with a 180-day elimination period, how much will they receive as a benefit in his first year in a nursing home facility (assume an annual cost of $91,440)? If the annual cost does not increase, how much will they receive in benefits in the second year? First year Second year S S
Transcribed Image Text:If Steven purchases the policy with a 180-day elimination period, how much will they receive as a benefit in his first year in a nursing home facility (assume an annual cost of $91,440)? If the annual cost does not increase, how much will they receive in benefits in the second year? First year Second year S S
Steven and Donna have been married for 35 years. Both are in great health, but they feel it is time that they start planning for their future health needs. Steven is 60 years old, and Donna is 61 years old. They have been approached by a long-term care insurance salesperson who is offering the following insurance product: . . . . . . Steven and Donna are interested in possibly purchasing one of these policies. Use the following information to help them analyze which policy may be the best alternative. . Annual maximum benefit: $67,200 or 80% of annual cost, whichever is less. Daily maximum benefit: $187 or 80% of daily cost, whichever is less. Billing cycle: 360 days. Premium for policy with 180-day elimination period: $3,248. Premium for policy with 90-day elimination period: $3,696. Premium for policy with 30-day elimination period: $4,256. . The current annual cost of a good nursing care facility in their area is $91.440. They have $28,000 saved in a money market savings account, $11,200 in a 1-year CD, and $13,440 in EE savings bonds.
Transcribed Image Text:Steven and Donna have been married for 35 years. Both are in great health, but they feel it is time that they start planning for their future health needs. Steven is 60 years old, and Donna is 61 years old. They have been approached by a long-term care insurance salesperson who is offering the following insurance product: . . . . . . Steven and Donna are interested in possibly purchasing one of these policies. Use the following information to help them analyze which policy may be the best alternative. . Annual maximum benefit: $67,200 or 80% of annual cost, whichever is less. Daily maximum benefit: $187 or 80% of daily cost, whichever is less. Billing cycle: 360 days. Premium for policy with 180-day elimination period: $3,248. Premium for policy with 90-day elimination period: $3,696. Premium for policy with 30-day elimination period: $4,256. . The current annual cost of a good nursing care facility in their area is $91.440. They have $28,000 saved in a money market savings account, $11,200 in a 1-year CD, and $13,440 in EE savings bonds.
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