An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company: $ 910 First birthday: Second birthday: $ 910 Third birthday: $ 1,010 Fourth birthday: $ 1,010 Fifth birthday: $ 1,110 Sixth birthday: $ 1,110 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $420,000. If the relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Child's 65th birthday

An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company: $ 910 First birthday: Second birthday: $ 910 Third birthday: $ 1,010 Fourth birthday: $ 1,010 Fifth birthday: $ 1,110 Sixth birthday: $ 1,110 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $420,000. If the relevant interest rate is 11 percent for the first six years and 7 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Child's 65th birthday

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 5DQ

See similar textbooks

Similar questions

An insurance company is offering a new policy to its customers. Typically the policy is bought by a parent or grandparent for a child at the child’s birth. For this policy, the purchaser (say, the parent) makes the following six payments to the insurance company: First birthday $ 910 Second birthday $ 910 Third birthday $ 1,010 Fourth birthday $ 850 Fifth birthday $ 1,110 Sixth birthday $ 950 After the child’s sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $410,000. If the relevant interest rate is 13 percent for the first six years and 7 percent for all subsequent years, what would the value of the deposits be when the policy matures? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The purchaser (say, the parent) makes the following six payments to the insurance company: First birthday: $950 Second birthday. $950 Third birthday: $1,050 Fourth birthday: $850 Fifth birthday: $1,150 Sixth birthday: $950 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $450,000. The relevant interest rate is 15 percent for the first six years and 7 percent for all subsequent years. Find the future value of the payments at the child's 65th birthday. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child’s birth. The purchaser (say, the parent) makes the following six payments to the insurance company: First birthday: $ 820 Second birthday: $ 820 Third birthday: $ 920 Fourth birthday: $ 850 Fifth birthday: $ 1,020 Sixth birthday: $ 950 After the child’s sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $320,000. The relevant interest rate is 10 percent for the first six years and 7 percent for all subsequent years. Find the future value of the payments at the child's 65th birthday.
Insurance underwriting relies heavily on statistics to determine the amount of insurance premium to charge. The probability that a 25-year-old female will live another year is 0.99786 based on data from the national registry agency. Calculate the insurance premium an insurance company would charge to break even on a 1 year $0.5million term-life insurance policy?
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?
Under the TRAIN law, the amount of premium allowed per family during thetaxable year for health and/or hospitalization insurance is P2,500. a.true b.false
Under the TRAIN law, the amount of premium allowed per family during thetaxable year for health and/or hospitalization insurance is P2,500. TRUE OR FALSE?
At 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:
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 0.23
The Revenue Account of a life insurance company shows the life assurance fund on 31st March, 2020 at $5,000,000 before taking into account the following items: -Claims covered under re-insurance $12,000.- Bonus utilized in reduction of life insurance premium $4,500. -Interest accrued on securities $8,000.-Outstanding premium $5,000-Claims intimated but not admitted ` $26,000. What is the life assurance fund after taking into account the above omissions?
When MUST the Policy Summary for a life insurance policy be delivered? Prior to the sales presentation With or prior to delivery of the policy Within a year after delivery of the policy Only upon delivery of a replacement policy.
A health insurance company that provides insurance against death has a previous year's reserve of $2,000. Calculate the probability that it will be solvent for the entire year knowing that 100 people use the company, who pay a premium of $100 at the beginning of the year, the probability of dying during the year is 0.01, and the benefit paid is $5000. To what amount can the premium be reduced so that the above probability does not fall below 80%.?