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Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purd insurance protection for the next 10 years while her children are growing up. Tina tells you that she can afford about $35 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 e 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?

Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purd insurance protection for the next 10 years while her children are growing up. Tina tells you that she can afford about $35 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 e 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?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $350 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? $
Transcribed Image Text: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 $350 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? $
TABLE 19-1 Annual Life Insurance Premiums (per $1,000 of Face Value) Term Insurance Permanent Insurance 5-Year 10-Year Whole 20-Payment 20-Year Term Term Life Life Endowment Age Male Female Male Female Male Female Male Female Male Female 18 $ 2.32 $ 1.90 $4.33 $ 4.01 $13.22 S11.17 $23.14 $19.21 $33.22 $29.12 19 2.38 1.96 4.42 4.12 13.60 11.68 24.42 20.92 33.68 30.04 20 2.43 2.07 4.49 4.20 14.12 12.09 25.10 21.50 34.42 31.28 21 2.49 2.15 4.57 4.29 14.53 12.53 25.83 22.11 34.90 31.79 22 2.55 2.22 4.64 4.36 14.97 12.96 26.42 22.89 35.27 32.40 23 2.62 2.30 4.70 4.42 15.39 13.41 27.01 23.47 35.70 32.93 24 2.69 2.37 4.79 4.47 15.90 13.92 27.74 24.26 36.49 33.61 25 2.77 2.45 4.85 4.51 16.38 14.38 28.40 25.04 37.02 34.87 35.30 35.96 26 2.84 2.51 4.92 4.60 16.91 14.77 29.11 25.96 37.67 27 2.90 2.58 5.11 4.69 17.27 15.23 29.97 26.83 38.23 28 2.98 2.64 5.18 4.77 17.76 15.66 30.68 27.54 38.96 36.44 29 3.07 2.70 5.23 4.84 18.12 16.18 31.52 28.09 39.42 37.21 30 3.14 2.78 5.30 4.93 18.54 16.71 32.15 28.73 40.19 37.80 35 33.12 43.67 3.43 4.23 2.92 6.42 5.35 24.19 22.52 37.10 39.19 40 3.90 7.14 6.24 27.21 25.40 42.27 36.29 48.20 42.25 45 6.12 5.18 8.81 7.40 33.02 29.16 48.73 39.08 51.11 46.04 50 9.72 8.73 14.19 9.11 37.94 33.57 56.31 44.16 58.49 49.20 55 16.25 12.82 22.03 13.17 45.83 37.02 61.09 49.40 71.28 53.16 60 24.10 19.43 37.70 24.82 53.98 42.24 70.43 52.55 79.15 58.08
Transcribed Image Text:TABLE 19-1 Annual Life Insurance Premiums (per $1,000 of Face Value) Term Insurance Permanent Insurance 5-Year 10-Year Whole 20-Payment 20-Year Term Term Life Life Endowment Age Male Female Male Female Male Female Male Female Male Female 18 $ 2.32 $ 1.90 $4.33 $ 4.01 $13.22 S11.17 $23.14 $19.21 $33.22 $29.12 19 2.38 1.96 4.42 4.12 13.60 11.68 24.42 20.92 33.68 30.04 20 2.43 2.07 4.49 4.20 14.12 12.09 25.10 21.50 34.42 31.28 21 2.49 2.15 4.57 4.29 14.53 12.53 25.83 22.11 34.90 31.79 22 2.55 2.22 4.64 4.36 14.97 12.96 26.42 22.89 35.27 32.40 23 2.62 2.30 4.70 4.42 15.39 13.41 27.01 23.47 35.70 32.93 24 2.69 2.37 4.79 4.47 15.90 13.92 27.74 24.26 36.49 33.61 25 2.77 2.45 4.85 4.51 16.38 14.38 28.40 25.04 37.02 34.87 35.30 35.96 26 2.84 2.51 4.92 4.60 16.91 14.77 29.11 25.96 37.67 27 2.90 2.58 5.11 4.69 17.27 15.23 29.97 26.83 38.23 28 2.98 2.64 5.18 4.77 17.76 15.66 30.68 27.54 38.96 36.44 29 3.07 2.70 5.23 4.84 18.12 16.18 31.52 28.09 39.42 37.21 30 3.14 2.78 5.30 4.93 18.54 16.71 32.15 28.73 40.19 37.80 35 33.12 43.67 3.43 4.23 2.92 6.42 5.35 24.19 22.52 37.10 39.19 40 3.90 7.14 6.24 27.21 25.40 42.27 36.29 48.20 42.25 45 6.12 5.18 8.81 7.40 33.02 29.16 48.73 39.08 51.11 46.04 50 9.72 8.73 14.19 9.11 37.94 33.57 56.31 44.16 58.49 49.20 55 16.25 12.82 22.03 13.17 45.83 37.02 61.09 49.40 71.28 53.16 60 24.10 19.43 37.70 24.82 53.98 42.24 70.43 52.55 79.15 58.08
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