Question

1. Ben is a 39 year old male and wishes to purchase $385,000 in twenty payment life insurance to cover his mortgage in the event of his death. If the rate per thousand the charts shows at his age is $15.29, how much would the life insurance cost him?

2. Bobby Jones purchased property insurance to cover a large shipment of seasonal merchandise. The annual premium of the policy was $7500. Three months later, the goods were sold and bobby canceled the policy. Using Table A what is the short-rate refund of premium.

Table A

Time policy is in force 2    3    4    5    6    7    8    9

% of annual premium 30 40 50 60 70 75 80 85

3. Gary Player needs temporary property insurance to cover his home for a period of 5 months. The annual premium is $1860. Use Table A to determine the amount of refund he will receive after 5 months.

Answer 1

1) Life Insurance will cost him equals to present value which is $385000 divided by $15.29= $25179

2)Bobby will get 40% of annual premium as refund

So amount of rsfund bobby gets will be 40% of $7500=$3000

3)Garry Player will get 60% of $1860 as refund of premium= $558