Business Decision: The Consultation 20. Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purchase life insurance protection for the next 10 years while her children ©iStock.com/MarsBars are growing up. Tina tells you that she can afford about $250 per year for insurance premiums. You have suggested either a 10-year term policy or a whole life policy. a. Rounded to the nearest thousand, how much insurance coverage can Tina purchase under each policy? Hint: Divide her annual premium allowance by the rate per $1,000 for each policy. b. If she should die in the next 10 years, how much more will her children receive under the term insurance? c. If she should live beyond the 10th year, what are her nonforfeiture options with the whole life policy?

Business Decision: The Consultation 20. Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purchase life insurance protection for the next 10 years while her children ©iStock.com/MarsBars are growing up. Tina tells you that she can afford about $250 per year for insurance premiums. You have suggested either a 10-year term policy or a whole life policy. a. Rounded to the nearest thousand, how much insurance coverage can Tina purchase under each policy? Hint: Divide her annual premium allowance by the rate per $1,000 for each policy. b. If she should die in the next 10 years, how much more will her children receive under the term insurance? c. If she should live beyond the 10th year, what are her nonforfeiture options with the whole life policy?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter8: Insuring Your Life

Section: Chapter Questions

Problem 3FPE

See similar textbooks

Similar questions

Tina Parker, a single mother, is 20 years old. She has called on you for an insurance consultation. Her objective is to purchase life insurance protection for the next 10 years while her children are growing up. Tina tells you that she can afford about $550 per year for insurance premiums. You have suggested either a 10-year term policy or a whole life policy. (a) Using Table 19-1, rounded to the nearest thousand, how much insurance coverage (in $) can Tina purchase under each policy? Hint: Divide her annual premium allowance by the rate per $1,000 for each policy. 10-year term policy $ whole life policy (b) If she should die in the next 10 years, how much more (in $) will her children receive under the term insurance? $ (c) Using Table 19-3 if she should live beyond the 10th year, determine her nonforfeiture options with the whole life policy. Option 1: Cash value (in $) $ Option 2: Reduced Paid-up Insurance (in $) $ Option 3: Extended Term (Enter your answer in years and an amount of…
Use the given table. Cindy started a whole-life insurance policy for $255,000 when she was 23 years old. At age 50, the policy has a cash value of $12,505 and Cindy converts the policy to extended term insurance for the same face value. Use 20-year level term rates to estimate the number of years of extended term insurance she has. Use a non-tobacco rate. E Click the icon to view the data table. Cindy has years of extended term insurance. (Do not round until the final answer. Then round to two decimal places as needed.)
Standard Insurance is developing a long - life insurance policy for people who outlive their retirement nest egg. The policy will pay out $240 comma 000240,000 on your 82 nd82nd birthday. You must buy the policy on your 65 th65th birthday. The insurance company can earn 55% on the purchase price of your policy. What is the minimum purchase price the insurance company should charge for this policy? Question content area bottom Part 1 What is the minimum purchase price the insurance company should charge for this policy?
Molly Lincoln, a 25-year-old personal loan officer at First National Bank, understands the importance of starting early when it comes to saving for retirement. She has committed $4,000 per year for her retirement fund and assumes that she'll retire at age 65. a. How much will Molly have accumulated when she turns 65 if she invests in equities and earns 8 percent on average? Round your answer to the nearest dollar. $ b. Molly is urging her friend, Isaac Stein, to start his plan right away, too, because he's 40. What would his nest egg amount to if he invested in the same manner as Molly and he, too, retires at age 65? Round your answer to the nearest dollar. Nest egg amount at 6% = $ Nest egg amount at 8% = $
A mother is thinking about funding her daughter’s medical education in 6 years when she is expected to enrol at UWI, St. Augustine. She opens a special savings account, where she can receive a lump sum in 6 years. If she is desirous of receiving $50,000 in 6 years when her daughter is matriculating, how much would you advise her to deposit in the savings account monthly if annual interest rate is 7%? Show all working.
A mother is thinking about funding her daughter’s medical education in 6 years when she is expected to enrol at UWI, St. Augustine. She opens a special savings account, where she can receive a lump sum in 6 years. If she is desirous of receiving $50,000 in 6 years when her daughter is matriculating, how much would you advise her to deposit in the savings account monthly if annual interest rate is 7%? Show all working. As a prospective business owner in the waste management business, you have researched the waste management truck market and you are attracted by two similarly functional truck offers. An identical cash price of $550,000 for the ARSLAN truck and the HIDRO-MAX truck with two different monthly repayment schedules offered by the respective financiers. The repayment schedule for the ARSLAN truck requires a down payment of 10% while the repayment schedule for the HIDRO-MAX truck requires a down payment of 15%. If the repayment is over a period of 7 years at an annual…
ii. If a life insurance company insures 50 females age 25 for $40,000, 10- year term policies, how much would they expect to pay out? Solve
While at lunch with a group of coworkers, one of your friends mentions that he plans to buy a variable life insurance policy because it provides a good annual return and is a good way to build savings for his 5-year-old’s college education. Another colleague says that she’s adding coverage through the group plan’s additional insurance option. What advice would you give them?
Imagine you are helping a client, Jill Pole, prepare for retirement Jill would like to withdraw $14,411 from her retirement fund exactly one month after she quits her job. Jill would like all subsequent monthly withdrawals to grow at an effective annual rate of 2.5%. Further, Jill would like to have her funds invested to earn an effective annual return of 7.7%. Jill expects to live for 26 years once she retires and does not plan to leave an inheritance. How much does Jill need to have in her retirement account on the day she retires in order to fund this stream of growing monthly distributions from her retirement account?.
Money Matters Read and analyze the situation below, then answer the question that follows. You are a new accounts clerk in Lucena Metropolitan Bank where you met Mr. and Mrs. Smith who are planning for the education of their children in the future. You introduce to them the advantage of time deposit having the following features: Option A: 1.10% interest annually in 3 years, Option B: 1.25% interest annually in 5 years Option C: 1.75% interest annually in 8 years The couple has an initial amount of P50,000 to be deposited. help the couple in deciding the terms of their investment make a proposal by completing the table. below. PROPOSAL PRINCIPAL TIME RATE INTEREST AMOUNT P50,000 P50,000 11 CO_Q2_General Mathematics SHS Module 2
Your best friend Mary is in discussion with you about saving for her retirement. You are to advise her on how much she should deposit annually to meet her retirement needs. Assume that she will deposit a fixed annual amount for the next 20 years into a retirement savings account, starting one year from now. Mary has a daughter who will be attending college and plans to make 5 withdrawals (starting one year after making her final deposit into the retirement account) of $35,000 each to pay for her annual tuition for the following 5 years. Commercial Banks will be paying 6 percent on such retirement accounts for the next 25 years. Kindly advise Mary on how much she should place in the account annually to cover her retirement needs.
After the birth of your first child, you decide to buy a life insurance policy for yourself but can't decide how much to buy. In the event of your untimely death, you estimate that the life insurance money can be invested in an account earning 8% interest compounded monthly. You would like your child to get a monthly payment of $1,500.00 for 18 years.How much should your life insurance policy be worth in order to achieve your goal? I should get a life insurance policy that is worth $_______