A whole life contract provides for a benefit of 1000 at the moment of death. The policyholder pays a premium of 20 at the beginning of each year for the contract. The assumed interest rate is 0.05. The policyholder dies at the end of 25.8 years. Calculate the future loss at issue.
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A whole life contract provides for a benefit of 1000 at the moment of death. The policyholder pays a premium of 20 at the beginning of each year for the contract.
The assumed interest rate is 0.05. The policyholder dies at the end of 25.8 years.
Calculate the future loss at issue.
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- A death benefit on a life insurance policy can be paid in one of the following three ways: (i) A perpetuity of $250 at the end of each month (ii) $795.70 at the end of each month for n years (iii) One payment of $81,007 at the end of n years If each payment method produces the same present value for the death benefit, what is the present value of the death benefit? A. 48,300 B. 55,600 C. 61,900 D. 69,200 E. 78,500You are given the following information about a person aged exactly x: = : 0.03, 9x+1 = 0.04, 9x+2 = 0.05 9x A Term Life Insurance contract with death benefit of 50,000 is set on this life, with a coverage period of n = 3 years. What is the Expected Present Value of the death benefit, if the annual effective interest rate is 8%? [As usual, a benefit is paid at the end of the year of death, if death occurs within the coverage period.] Select one: a. 5292.2 b. 5088.1 C. 6010.5 d. 4704.4 e. 4900.2A 40-year-old individual will be paid 100 TL in the first year at the beginning of the term and 50 TL increase in the following years for 5 years. Calculate the net single premium to be paid by the individual who will purchase such an annuity of life.
- On retirement, a workman finds that his company pension call for payment of P300 to him or to his estate if he dies at the beginning of each month for 20 years. Find the present value of this pension 5% compounded monthly.Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth birthday) or a semi-annual annuity for the remainder of the person's life - i.e., starting 6 months from the date of retirement and including his/her date of death. Interest rates are 7 percent compounded annually, and a person's life expectancy has been determined statistically as being 78.5 years. Calculate the amnunt of the annuity that would make a person indifferent between the options? A person joins a pension plan at age 40 (40" birthday). How much will s/he have to pay into the pension fund each year in order to accumulate a balance of $500,000 by the time s/he retires (age 65)? Assume that the final payment is on his/her 60th birthday. Interest rates are 9% compounded semi-annually.A perpetuity of $1 each year, with the first payment due immediately, has a present value of $25 at an annual effective rate of i%. The owner exchanges it for another perpetuity with the first payment due immediately and subsequent payments due at two year intervals. What should the payment of the second perpetuity be, in order to keep the same interest rate, i%, and the same present value? A B с D E Less than $1.90 At least $1.90, but less than $1.94 At least $1.94, but less than $1.98 At least $1.98, but less than $2.02 $2.02 or more
- Assume that a pension plan offers to pay $500,000 on a person's retirement (his/her sixty-fifth birthday) or a semi-annual annuity for the remainder of the person's life – i.e., starting 6 months from the date of retirement and including his/her date of death. Interest rates are 7 percent compounded annually, and a person's life expectancy has been determined statistically as being 78.5 years. Calculate the amounț of the annuity that would make a person indifferent between the options?l .YsmMr. Bearer may choose to take a lump-sum payment of $25,292.8 now from his insurance policy or an annuity of $3,200 annually as long as he lives. How long must Mr. Bearer anticipate living for the annuity to be indifferent to the lump sum if interest rate is 8%? a. 13 years b.15 years c. 11 years d. 9 yearsJust prior to the payout period the amount of money that is available in the contract as principal paid in over the life of the annuity is determined at $200,000. The total annuity is currently valued at $360,000. The annuity payment is calculated at $24,000 per year. Our client wants to retire at age 65. The IRS Tables multiplier from the IRS Table for Age 65 is 15 (remaining life expectancy). What amount will be tax-excludible to the annuitant? $1,111 until the principal amount has been exhausted $888.89 for the life of the annuitant $1,111 for the life of the annuitant $888.89 until the principal amount has been exhausted
- Emerson Cammack wishes to purchase an annuity contract that will pay him $7,000 a year for the rest of his life. The Philo Life Insurance Company figures that his life expectancy is 20 years, based on its actuary tables. The company imputes a compound annual interest rate of 6 percent in its annuity contracts. a. How much will Cammack have to pay for the annuity? b. How much would he have to pay if the interest rate were 8 percent?If the Alfa Life Insurance Co. will pay you and your heirs $1 at the beginning of each year forever, how much will you pay for the policy assuming the required return on this investment is 1 percent?Susan Co expects to receive P20,940 at the beginning of each period per year in Social Security payments. Assume that she receives these payments for 28 years and use a rate of 6% per year. Find the present value of her retirement payments.