PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337117005
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Chapter 8, Problem 6FPE
Summary Introduction
To determine: Premiums payable for life insurance policies of 25 years old and 40 years old, male and female insurers.
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PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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- A 25-year-old and a 50-year-old apply for 10-year term life insurance plans. Which person will have a higher premium and why?arrow_forwardUsing the "Human Life Value" method, how much life insurance should you purchase if you have 45 years until retirement, an annual income of $65,100 received at the start of each years, and a time value of money of 9%? (Assume 80% income replacement, ignore taxes and inflation.)arrow_forwardIf Carissa has a $140,000 home insured for $110,000, based on the 80 percent coinsurance provision, how much would the insurance company pay on a $14,200 claim?arrow_forward
- Because Brooklynn has some health issues, she must pay 15% more for life insurance. About how much more annually will a $130,000 10-year term insurance at age 40 cost Brooklynn than someone of the same age without health issues?arrow_forwardA policyholder wishes to receive $5,000 per month in retirement. They plan to retire at the age of 64, the insurer is guaranteeing a 4% rate of return, and their life expectancy is 86. If they deposit each of the following amounts annually before retiring, at what age do they need to start saving? (A).$10,000 25 years old (technically, 25.60759 years old) (B).$15,000 33 years old (technically, 33.26361 years old) (C).$20,000 38 years old (technically, 38.17201 years old) (D).$25,000 41 years old (technically, 41.64589 years old)arrow_forwardTheir employers provide a short-term disability benefit for 6 months which is 50% of their currently monthly income. Should the Jacksons buy disability insurance? If so, how much should they buy? Assume that disability insurance costs 2% of monthly income needed.arrow_forward
- Darlene wants to buy a $200,000 term life insurance policy. She is 34 years old. Using the premium table, what is her annual premium for a 10-year policy? a $100 b. $108 C$1.202 d. $1.290arrow_forwardA policyholder wishes to annuitize the cash value of her insurance policy at retirement. She desires an annual payment of $97.8,000 per year and the cash value is expected to be $1.5 million at retirement. Approximately how many payments can she expect to receive if annuity interest rates are 5.739 percent? (Do not round intermediate calculations. Round your answer to a whole number.)arrow_forwardKenji wants to buy a $150,000 term life insurance policy. He is 30 years old. Using the premium table, what is his annual premium for a 5-year policy?arrow_forward
- Suppose your mother has worked for 40 years and has accumulated $1,000,000. She wishes to begin receiving an annual payment beginning next year, and continuing for another 20 years. If a pension plan will guarantee her an annual interest rate of at least 5% effective, what is her payment?arrow_forwardIf a nurse invests $6,000 at the end of each year in her retirement account at 5% annual rate of return, what would her retirement account be worth if she retires in: (use spreadsheet)a. 20 yearsb. 30 yearsc. 35 yearsd. What if she deposits the $6,000 at the beginning of each year for 25 years?arrow_forwardMatt Clark, age 27, decided to take out a limited payment life policy. He chose this because he expects his income to decline in future years. Matt decided to take out a 20-year payment life policy with a coverage amount of $90,000. What is the amount of his annual premium?arrow_forward
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