Chapter 19.I, Problem 5RE

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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-Up |
Extended Term |
|||||

of Policy |
Force |
Type of Policy |
Value |
Insurance |
Years Days |
||||

5. | 100,000 | Female—29 | 5-Year Term |

To determine

**To calculate:** The annual premium, semiannual premium, quarterly premium and monthly premium if a 29 year old female has the face value of $100,000 for an 5 year insurance policy.

Explanation

**Given Information:**

A 29 year old female has the face value of $100,000 for a 5 year insurance policy.

**Formula used:**

The formulas used for calculation are listed below:

**Calculation:**

Life insurance is defined as the insurance which pledges a specific sum of money to the surviving beneficiaries upon the death of the person who is assured. The followings steps are used to calculate

Step 1: It is needed to calculate the number of $1,000 of insurance desired by the formula given below:

Step 2: The annual premium is calculated by the formula given below:

The rate per $1,000 is calculated from the annual life insurance premiums table. A 29 year old female has the face value of $100,000 for a 5 year insurance policy has a 2

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