Sarah is the beneficiary of her mother’s $100,000 life insurance policy. When her mother dies, Sarah is relying on the entire death benefit to pay expenses related to her mother’s funeral and end-of-life care. However, unbeknown to Sarah, her mother had outstanding policy loans totaling $60,000. How much can Sarah expect to receive in death benefits from her mother’s policy?
Sarah is the beneficiary of her mother’s $100,000 life insurance policy. When her mother dies, Sarah is relying on the entire death benefit to pay expenses related to her mother’s funeral and end-of-life care. However, unbeknown to Sarah, her mother had outstanding policy loans totaling $60,000. How much can Sarah expect to receive in death benefits from her mother’s policy?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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H6.
Sarah is the beneficiary of her mother’s $100,000 life insurance policy. When her mother dies, Sarah is relying on the entire death benefit to pay expenses related to her mother’s funeral and end-of-life care. However, unbeknown to Sarah, her mother had outstanding policy loans totaling $60,000. How much can Sarah expect to receive in death benefits from her mother’s policy?
a. $100,000
b. $60,000
c. $40,000
d. $20,000
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