A select life aged 40 purchases a 10-year endowment insurance with $100,000 sum insured. Premiums are payable annually in advance and death benefits are payable at the end of the year of death. Assume that (i) commission is 10% of the first premium and 5% of each subsequent premium, (ii) other expenses are $100 at issue, and $10 at each subsequent premium date, (iii) mortality follows the Standard Select Life Table, and (iv) interest is 5% per year. Calculate the annual premium.
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- A select life aged 60 purchases a 10-year endowment insurance with $100,000 sum insured. Premiums are payable annually in advance and death benefits are payable at the end of the year of death. Assume that (i) commission is 10% of the first premium and 4% of each subsequent premium, (ii) other expenses are $50 at issue, and $5 at each subsequent premium date, (iii) mortality follows the Standard Select Life Table, and (iv) interest is 5% per year. Calculate the annual premium.Consider a 25-year term insurance issued to a life aged 35 with annual premiums payable throughout the policy term, with sum insured $100,000 payable at the end of the year of death if death occurs during the term. Expenses are as follows: 10% of the 1st annual premium and 2% of each subsequent premium, with an inception expense of $100 and renewal expenses of (at the time of the payment of the 2nd and each subsequent premium) of $15. Calculate the annual premium (using the equivalence principle). Use table D (Standard Ultimate Survival Model) with i=5%.Julia Baker died, leaving to her husband Brent an insurance policy contract that provides that the beneficiary (Brent) can choose any one of the following four options. a. $55,000 immediate cash. b. $4,000 every 3 months payable at the end of each quarter for 5 years. c. $18,000 immediate cash and $1,800 every 3 months for 10 years, payable at the beginning of each 3-month period. d. $4,000 every 3 months for 3 years and $1,500 each quarter for the following 25 quarters, all payments payable at the end of each quarter. Instructions If money is worth 2½% per quarter, compounded quarterly, which option would you recommend that Brent exercise?
- 1. At the conclusion of each year, each participant made a deposit of 1500.35 into a sinking fund. What was the principal in the fund immediately after the seventh deposit was made if the fund generated interest at a rate of 6.02% per year compounded quarterly? 2. For ten years, a man inherited a 100,000 endowment every three months. He may, however, elect to receive a single lump sum payout at the end of the four-year period. If the cost of money is 14.06 percent compounded quarterly, how much is this lump sum?A man turns 35 today and wishes to provide supplemental retirement income of 3000 at the beginning of each month starting on his 60th birthday. Starting today, he makes monthly contributions of X to a fund for 25 years. The fund earns an annual nominal interest rate of 8% compounded monthly. On his 60th birthday, each 1000 of the fund will provide 9.65 of income at the beginning of each month starting immediately and continuing as long as he survives. Calculate X. a. 324.70 b. 326.90 c. 328.10 d. 355.50 e. 450.70Ms. Anna Ang, aged 39, recently purchased an endowment plan from an insurer that requires her to set aside $24,000 per year for the next 23 years till she retires at age 62. The first premium payment occurs at the beginning of the period. Assuming an inflation rate of 2% and an estimated rate of return of 4.0% from the endowment plan, what is the estimated future value of Anna’s regular savings at age 62?
- On January 1, the Wiek Company contracted with its president, T. Mae, to make a single deposit immediately to establish a fund with a trustee that pays Mae $40,000 per year for each of the three years following retirement. Mae will retire after 10 years on December 31, and the three equal annual payments are to be made by the trustee each December 31 starting at the end of the 11th year. The trustee will add to the fund 8% annual compound interest each year-end. The fund is to have a zero balance on December 31, immediately after the last payment to the president. When answering the following questions, round your answers to the nearest whole number. Do not use negative signs with your answers. a. Compute the present value of the pension obligation. Answer b. How much of the total amount paid to the president during the payout period is provided Answer by interest earned during the three-year payout period?Julia Baker died, leaving to her husband Tony an insurance policy contract that provides that the beneficiary (Tony) can choose any one of the following four options. Money is worth 2.5% per quarter, compounded quarterly. Compute Present value if: $4,060 every 3 months for 3 years and $1,480 each quarter for the following 25 quarters, all payments payable at the end of each quarter. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)Mia will retire 10 years from now and wants to establish a fund today that will pay $48,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10% compound interest. How much cash must Mia deposit on January 1, year 1, to provide the five equal annual year-end cash payments from the fund? $Answer
- Grace's employer is now offering group-term life insurance. The company will provide each employee with $185,000 of group-term life insurance. It costs Grace's employer $875 to provide this amount of insurance to Grace each year. Assuming that Grace is 31 years old, use the tale to determine the monthly premium that Grace must inckude in income as a result of receiving the group-term life benefit. EXHIBIT 12-08 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection 5-Year Age Bracket. Cost Per $1,000 of Protection for One Month Under 25 $0.05 25 to 29 0.06 30 to 34 0.08 35 to 39 0.09 40 to 44 0.10 45 to 49 0.15 50 to 54 0.23Beth purchased a $50,000 nonparticipating whole life insurance policy. The annual premium was $1,324. The cash value of the policy after 10 years will be $13,740. Assuming 5% interest rates. What is the traditional net cost of this policy, per thousand per year, over the first 10 years the policy is in force? (Round your answer to 2 decimal places)Mia will retire 10 years from now and wants to establish a fund today that will pay $30,000 cash at the end of each of the first five years after retirement. Specific dates are these: date of a single deposit by Mia, January 1, year 1; date of first cash payment from the fund to Mia, December 31, year 11. The fund will pay 10% compound interest. How much cash must Mia deposit on January 1, year 1, to provide the five equal annual year-end cash payments from the fund?