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Contemporary Mathematics for Busin...

8th Edition
Robert Brechner + 1 other
ISBN: 9781305585447

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BuyFindarrow_forward

Contemporary Mathematics for Busin...

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

Calculate the annual. semiannual, quarterly, and monthly premiums for the following life insurance policieas

Face Value Sex and Age Annual Semiannual Quarterly Monthly
of Policy of Insured Type of Policy Premium Premium Premium Premium
7. 60.000 Male—50 Whole Life

To determine

To calculate: The value of annual, semi-annual, quarterly and monthly premiums from the provided life insurance premium face value of policy is $60,000, sex and age of insured is male- 50 and type of policy is whole life.

Explanation

Given Information:

The provided life insurance is,

The face value of policy is $60000, sex and age of insured is male- 50 and type of policy is whole life.

Formula Used:

To calculate the life insurance premium as follows:

Step1: in first, to calculate the number of $1,000 insurance desired by dividing the face value of the policy by $1,000 and round to the nearest whole $1,000.

numberof$1000=facevalue of policy$1000

Step2: Locate the value of appropriate premium rate per $1,000 from the table 191 and choose the rate based on the policy desired and the age and sex of the provided applicant.

Step3: To calculate the annual premium by multiplying the number $1,000 of insurance desired from the table 191.

Annualpremium=numberof$1000×rate per $1000

Step4: Finally, multiply the appropriate 19-2 premium factor by the annual premium.

Premium other than annual=Annual premium×premium factor

Calculation:

Consider the provided life insurance, the face value of policy is $60000, sex and age of insured is male- 50 and type of policy is whole life.

The face value of policy is $60,000.

Step 1: numberof$1000=facevalue of policy$1000

Substitute the value $60,000 as face value of policy as,

numberof$1000=facevalue of policy$1000=60,0001000=60

Step 2: Next find the premium per $1000 for the whole life of the insurance for the 50year old woman to be $37.94 from the table 19-1.

Step 3: Calculate the annual premium is,

Annualpremium=numberof$1000×rate per $1000=60×37.94=$2276.4

Step 4: Calculate the monthly premium is,

Monthlypremium=annual premium×monthly premium factor

The monthly premium factor would be 9% of the annual premium

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