Pfin (book Only)
6th Edition
ISBN: 9781337117029
Author: Billingsley, Randy; Joehnk, Michael D.; Gitman, Lawrence J.
Publisher: Cengage Learning
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Chapter 10, Problem 1FPE
Summary Introduction
To discuss: Whether clause of 90% co-insurance is better than 80% clause and state reasons to support person X’s answers.
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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?
2. Your dad applied for a term life insurance (provides the insured person with a coverage
for a specified period of time of one, five or more years), He got a flexible policy (allows
the insured person to change certain components of the insurance plan) because some
payment options include a policy payout (insurance proceeds) as soon
period achieved or upon contingency (death or accident). Some companies offer
insurance products that can be availed only upon death. Because of this better option,
your dad decided to avail of insurance A's flagship insurance product. Your dad's
contribution per year is P20,000 that earns 6% compounded monthly for 20 years. How
much will be paid out to your dad after 20 years by insurance A?
as the target
9. If Diana wants a life insurance policy that will provide both a fixed death
benefit and guaranteed cash value, what type of policy should she consider
buying?
a. annual renewable term life insurance
b. universal life insurance
c. whole life insurance
d. variable universal life insurance
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- Emilio is purchasing homeowner's insurance. His house was recently appraised at $266,000. Emilio plans on insuring the contents at 50% of the home's value. Use Table 19-4 in your text to determine the annual homeowner's insurance premium if Emilio's home has structural classification A and area rating 3. Annual homeowner's insurance premium: $arrow_forwardPlease solve thisarrow_forwardIf Carissa has a $140,000 home insured for $110,000, based on the 80 percent coinsurance provision, how much would the insurance company pay on a $14,200 claim?arrow_forward
- 2. Using Table 19-5 and 19-6, find the annual premium for an automobile insurance policy for Sandra who has a good credit rating. She lives in Territory 1 and buys 50/100/50 coverage for her liability protection. Sandra's vehicle is Model Class 2 and is five years old. In addition to the liability coverage, she purchased comprehensive and collision insurance with a $250 deductible on comprehensive and a $500 deductible on collision. TABLE 19-5 Annual Automobile Liability Insurance Premiums Territory 1 Territory 2 Liability Limits* GOOD ОСС BAD GOOD ОСС BAD 50/100/50 385 600 846 354 552 778 100/300/100 425 682 961 391 627 884 250/500/250 460 750 1036 423 690 953 500/1000/500 530 843 1208 488 776 1111 GOOD = good credit; OCC = occasional payments past 30 days; BAD = judgments, collection, bankruptcy "Bodily injury maximum for one person/Total bodily injury coverage per accident/Property damage TABLE 19-6 Annual Auto Insurance Premium Rates for Comprehensive and Collision Territory 1…arrow_forwardJessica Railes is purchasing a condo and is shopping for an HO-6 policy. Her auto insurer quoted her an annual rate of $ 450.$450. However, if she were to insure both the condo and her car with the same company, the insurer would give her a discount of 66 percent on her HO-6 policy and a discount of 88 percent on her $970970 annual auto premium. By how much will this reduce Jessica's premium? In addition to the discount, what are other advantages of purchasing both auto and homeowner's insurance with the same company? Question content area bottom Part 1 The amount by which Jessica's premium would be reduced is $104.6104.6. (Round to the nearest cent.) Part 2 In addition to the discount, what are other advantages of purchasing both auto and homeowner's insurance with the same company? "Another advantage is that if Jessica ever had a claim involving both her home and her car (e.g., a tree falling on a car at home during a wind storm), it would be…arrow_forwardA couple can obtain an 80 percent loan to purchase a $380,500 home and must pay a loan origination fee of 1.5 points and 2.25 discount points to obtain a 4 percent, 30-year loan, what amount of money will be required to pay the down payment, the origination fee and the required discount points?arrow_forward
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- Cindy Schultz was recently hired at Bradonly Health Care. Cindy is in her 30s and in great health. She wants a flexible insurance plan and a tax-free savings plan. Which of the following would be the best option for Cindy? a. HDHP b. PPO c. Medicaid d. HMOarrow_forward32. Which one of the following statements correctly identifies a purpose or characteristic of a second-to-die life insurance policy? A) The premium will cost more than the combined premiums for separate policies on all of the insured parties. B) When the insured parties are a husband and wife, a purpose may be to allow the first-to-die spouse to leave everything to the surviving spouse. C) This policy is also known as a split dollar policy. D) This is a type of policy that will pay benefits at the death of the first insured to die.arrow_forwardAt May 31, 20x1, Quay owned a P10,000 whole-life insurance policy with cash surrender value of P4,500. The cash surrender value is used as a collateral security for an outstanding loan of P2,500. In Quay's May 31, 20x1 statement of financial position, what amount should be reported as investment in life insurance? Answer:arrow_forward
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