   Chapter 19.I, Problem 10RE ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

#### Solutions

Chapter
Section ### Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447
Textbook Problem

# Calculate the value of the nonforfeiture options for the following life insurance policies. Face Value Years in Cash Reduced Paid-U p Extended Term of policy Force Type of Polio Value Insurance Years Days 10. 250,000 7 20-Year Endowment

To determine

To calculate: The value of the non-forfeiture options cash value, reduced paid-up insurance and extended term years or days for the provided life insurance, where the face value of policy is $250,000, years in force 7 and type of policy is 20years endowment. Explanation Given Information: The provided life insurance is, The face value of policy is$250,000, years in force 7 and type of policy is 20years endowment.

Formula Used:

The steps to calculate the various non-forfeiture options are as follows:

Step1: First calculate the number of $1000 of insurance by division of the face value of the policy by$1000 and rounding to the nearest whole $1000. Numberof$1000=Facevalue of the policy$1000 Step2: Now there are three options: Option I-Cash value: For this fix the appropriate dollars per$1000 in the Cash value column of the table 19-3 and multiply it by the number of $1000 of insurance. Option II-Reduced Paid -Up Insurance: Determine the appropriate dollars per$1000 in the Reduced Paid -Up Insurance column of the table 19-3 and multiply it by the number of $1000 of insurance. Option III-Extended Term: For this fix the length of time of new extended term policy in Years and Days column of table 19-3. Calculation: Consider that the face value of policy is$250,000, years in force 7 and type of policy is 20years endowment.

The face value of policy is $250,000. Step 1: numberof$1000=facevalue of policy$1000 Substitute the value$250,000 as below,

numberof$1000=facevalue of policy$<

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