Rosie, age 30, would like to purchase a life insurance policy that will accumulate a cash value which will be paid beneficiaries in addition to the death benefit, and that will allow her to access the cash value during her lifetime withdrawals. Which of the following policies is most likely to meet her needs? O a 20-year term with a double indemnity rider O b. Ordinary whole life. O c. Universal life option A O d. Universal life option B

Rosie, age 30, would like to purchase a life insurance policy that will accumulate a cash value which will be paid beneficiaries in addition to the death benefit, and that will allow her to access the cash value during her lifetime withdrawals. Which of the following policies is most likely to meet her needs? O a 20-year term with a double indemnity rider O b. Ordinary whole life. O c. Universal life option A O d. Universal life option B

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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A couple is saving for retirement with three different accounts. The table below shows the current balances in their accounts, along with their yearly contribution, and the yearly return on each account. The couple will retire in 20.00 years and pool the money into a savings account that pays 3.00% APR. They plan on living for 29.00 more years and making their yearly withdrawals at the beginning of the year. What will be their yearly withdrawal? Account Fidelity Mutual Fund Vanguard Mutual Fund Employer 401k Balance $23,497.00 $187,441.00 $314,214.00 Yearly Contribution $1,000.00 $10,000.00 $15,000.00 APR 6.00% 7.00% 6.00%
Janet receives a $ 10,000 life insurance benefit. If she uses the proceeds to buy an n-year annuity immediate, the annual payout will be 1534.86. If a 2n-year annuity due is purchased, the annual payout will be 994.13. Both calculations are based on an effective annual interest rate of i. Calculate i.
Jack asked Jill to marry him, and she has accepted under one condition: Jack must buy her a new $300,000 Rolls-Royce Phantom. Jack currently has $27,110 that he may invest. He has found a mutual fund with an expected annual return of 5.5 percent in which he will place the money. How long will it take Jack to win Jill's hand in marriage? Ignore taxes and inflation. Question content area bottom Part 1 The number of years it will take for Jack to win Jill's hand in marriage is enter your response here years
Sarah will receive a perpetual annul income of $50,000 on her retirement, commencing in 3 years time. If the interest rate is 8% per annum, how much is this worth as a single sum today? Group of answer choices 535,837 675,236 550,655 223,000
You annually invest $2,000 in an individual retirement account (IRA) starting at the age of 30 and make the contributions for 15 years. Your twin sister does the same starting at age 35 and makes the contributions for 25 years. Both of you earn 7 percent annually on your investment. What amounts will you and your sister have at age 60? Use Appendix A and Appendix C to answer the question. Round your answers to the nearest dollar.Amount on your account: $ Amount on your sister's account: $ Who has the larger amount at age 60?-Select-You haveYour sister hasItem 3 the larger amount.
Christina is planning on buying an insurance policy that will pay for $157,250 a year for 25-years, with the first payment occurring in 15 years, if she is still alive, otherwise the policy will payout a lump sum to her heirs at the end of year 14. The rate of return on the policy is5.5 percent? What is the value of the lump payout? If Christina purchases the policy, what is the maximum she is willing to pay?
Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purchase life insurance protection for the next 10 years while her children are growing up. Tina tells you that she can afford about $550 per year for insurance premiums. You have suggested either a 10-year term policy or a whole life policy. (a) Using Table 19-1, rounded to the nearest thousand, how much insurance coverage (in $) can Tina purchase under each policy? Hint: Divide her annual premium allowance by the rate per $1,000 for each policy. 10-year term policy $ whole life policy (b) If she should die in the next 10 years, how much more (in $) will her children receive under the term insurance? $ (c) Using Table 19-3 if she should live beyond the 10th year, determine her nonforfeiture options with the whole life policy. Option 1: Cash value (in $) $ Option 2: Reduced Paid-up Insurance (in $) $ Option 3: Extended Term (Enter your answer in years and an amount of…
Suppose your aunt has worked for 40 years and has accumulated a "nest-egg" of $1,000,000. She wishes to begin receiving an annual payment beginning next year, and continuing for another 20 years. If a pension plan will guarantee her an annual interest rate of at least 5% effective, what is her payment? Please show procedure and formulas used. Thanks
choose three major insurance companies, obtain the premiums of life insurance policies for a 30 year old man with $300, 000 insurance coverage (death benefit). Compare the premium for term, whole or universal life insurance. Prepare a premium table and indicate which policy you consider and why?
The solution I'm coming up with is incorrect. Please solve.
Joe is 30 years old, married, and his wife is expecting their first baby. Joe makes $48,000 per year and has $200 budgeted per month to spend on life insurance. He has started looking at his options and has three choices: BAD WHOLE LIFE BETTER 20-YEAR TERM BEST 20-YEAR TERM $250,000 $500,000 Coverage $250,000 Premium $200/month $13/month $20/month Investments $0 $187/month $180/month Investment Value $34,000 at Age 50 $186,840 $179,847 Investment Value at Age 70 $124,000 $2,222,010 $2,138,835 *Always buy a policy that covers 10-12 times your annual pretax income! R FOUNDATIONS IN PERSONAL FINANCE Life Insurance Plans CHAPTER 9, LESSON 5 PAGE 1 OF 3 1. For each insurance option, how much would Joe pay in total premiums over 20 years compared the amount of coverage he would receive? 2. Which option is the best value for Joe's money? Why? 3. How did Joe arrive at the numbers in the investments row on his chart? 4. Why is Joe thinking about buying life insurance?
Assume that you have calculated: (a) premiums for life insurance policies and (b) payments to annuitants based upon an assumption that everybody dies before attaining age 101. Now you discover that a significant number of your policy owners are likely to live beyond age 101 and some will live to age 121. How will that affect your business?

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