A special endowment assurance policy is issued to a male aged 55 and a female aged 50 with a term of 20 years. A benefit of $500,000 is payable immediately on the last death of the two lives. There is a survival benefit of $600,000 if both of them are alive; if only one of them is alive, the survival benefit is $400,000. Premiums are payable annually in advance over the term of the policy as long as one of them is alive. The interest rate is 4% per annum and the mortality basis is PA92C20. Calculate the net annual premium for this policy. Correct your answer to the nearest cent.
A special endowment assurance policy is issued to a male aged 55 and a female aged 50 with a term of 20 years. A benefit of $500,000 is payable immediately on the last death of the two lives. There is a survival benefit of $600,000 if both of them are alive; if only one of them is alive, the survival benefit is $400,000. Premiums are payable annually in advance over the term of the policy as long as one of them is alive. The interest rate is 4% per annum and the mortality basis is PA92C20. Calculate the net annual premium for this policy. Correct your answer to the nearest cent.
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 24CE
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Transcribed Image Text:A special endowment assurance policy is issued to a male aged 55 and a
female aged 50 with a term of 20 years. A benefit of $500,000 is payable
immediately on the last death of the two lives. There is a survival benefit of
$600,000 if both of them are alive; if only one of them is alive, the survival
benefit is $400,000. Premiums are payable annually in advance over the term
of the policy as long as one of them is alive. The interest rate is 4% per
annum and the mortality basis is PA92C20. Calculate the net annual
premium for this policy. Correct your answer to the nearest cent.
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