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5. Consider a 10-year annual premium endowment insurance with sum insured $200,000 issued to a life...
A $21,000 ordinary life insurance policy for a 23-year old female can be obtained for annual...
A $21,000 ordinary life insurance policy for a 23-year old female can be obtained for annual premiums of approximately $200. This type of policy (ordinary life) would pay a death benefit of $21,000 in exchange for the annual premium paid during the lifetime of the insured person. If the average life expectancy of a 23-year old female is 63 years, what interest rate establishes equivalence between cash outflows and inflows for this type of insurance policy? Assume all premiums are...
Question 1 BWS Corporation pays the premiums on an $80,000 group-term life insurance policy on the...
Question 1 BWS Corporation pays the premiums on an $80,000 group-term life insurance policy on the life of its 45-year-old vice-president, Warren. The annual cost per $1,000 of coverage for a person aged 45 to 49 is $1.80. If Warren has paid $25 toward the cost of the insurance, what is the cost of hte policy includible in Warren's gross income? 1) $278.00 2) $144.00 3) $54.00 4) $29.00 5) $0 Question 2 During 2019, Edward East had wages of...
Scenario: Disability Insurance Claims Handling at InsureIT We consider the following business pro...
Scenario: Disability Insurance Claims Handling at InsureIT We consider the following business process for handling insurance claims for disability insurance[1] at an insurance company InsureIT. The process starts when a customer lodges a disability claim. To do so, the customer fills in a form including a 2-page questionnaire describing the disability. The customer can submit the form physically at one of the branches of InsureIT, by postal mail, fax or simply via e-mail (digitally-signed document). When a claim is received,...
Media Bias Inc. issued bonds 10 years ago at $1,000 per bond. These bonds had a 30-year life when issued and the annual...
Media Bias Inc. issued bonds
10 years ago at $1,000 per bond. These bonds had a 30-year life
when issued and the annual interest payment was then 11 percent.
This return was in line with the required returns by bondholders at
that point in time as described below: Real rate of return 2 %
Inflation premium 4 Risk premium 5 Total return 11 % Assume that 10
years later, due to good publicity, the risk premium is now 3
percent...
On August 1, Terry issued a $1,600,000, semi-annual, 6 year, 4.5% bond. The market rate for...
On August 1, Terry issued a $1,600,000, semi-annual, 6 year,
4.5% bond. The market rate for similar bonds on that day was 5.0%.
Terry uses the effective interest method to record the amortization
or premiums and discounts. Terry’s management has decided to report
net bonds on the balance sheet, instead of reporting the bond and
its premium or discount separately. No entries have yet been made
for the bond. Terry’s management would like to know the effect of
the sale...
Part B. Gross Income Inclusions & Exclusions For each Q-6 through Q-19 below, determine whether the...
Part B. Gross Income Inclusions & Exclusions For each Q-6 through Q-19 below, determine whether the item described should be INCLUDED IN or EXCLUDED FROM the Gross Income of the taxpayer who receives the item. • Darken Box A on the Scantron sheet if the item should be INCLUDED IN gross income • Darken Box B on the Scantron sheet if the item should be EXCLUDED FROM gross income 6. $25,000 scholarship for tuition and books received by a full-time...
objective risk excepr: O All fthe following are methods used by ingurance are methods used by...
objective risk excepr: O All fthe following are methods used by ingurance are methods used by insurance companies to A. safety education programs. C. investment in investment grade securities only D. use of deductibles. selective underwriting of insureds of: 7. A life insurance company needs more liquidity when selling a high proportion A. one-year renewable term policies B. annuities. C, thirty-year term policies D. whole life policies. one of the following statements about universal life insurance is not true? A....
Use the following to answer the next six questions: During the fiscal year ended December 31,...
Use the following to answer the next six questions: During the fiscal year ended December 31, 2017. the City of Johnstown issued 6% genera obligation serial bonds in the amount of $2.000.000 at 102 ($2.040,000) and used $1,980,000 of the proceeds to construct a fire station. The $40,000 premium was transferred to a debt service fund. The $20.000 left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds...
A $21,000 ordinary life insurance policy for a 23-year old female can be obtained for annual premiums of approximately $200. This type of policy (ordinary life) would pay a death benefit of $21,000 in exchange for the annual premium paid during the lifetime of the insured person. If the average life expectancy of a 23-year old female is 63 years, what interest rate establishes equivalence between cash outflows and inflows for this type of insurance policy? Assume all premiums are...
Media Bias Inc. issued bonds
10 years ago at $1,000 per bond. These bonds had a 30-year life
when issued and the annual interest payment was then 11 percent.
This return was in line with the required returns by bondholders at
that point in time as described below: Real rate of return 2 %
Inflation premium 4 Risk premium 5 Total return 11 % Assume that 10
years later, due to good publicity, the risk premium is now 3
percent...
On August 1, Terry issued a $1,600,000, semi-annual, 6 year,
4.5% bond. The market rate for similar bonds on that day was 5.0%.
Terry uses the effective interest method to record the amortization
or premiums and discounts. Terry’s management has decided to report
net bonds on the balance sheet, instead of reporting the bond and
its premium or discount separately. No entries have yet been made
for the bond. Terry’s management would like to know the effect of
the sale...
Part B. Gross Income Inclusions & Exclusions For each Q-6 through Q-19 below, determine whether the item described should be INCLUDED IN or EXCLUDED FROM the Gross Income of the taxpayer who receives the item. • Darken Box A on the Scantron sheet if the item should be INCLUDED IN gross income • Darken Box B on the Scantron sheet if the item should be EXCLUDED FROM gross income 6. $25,000 scholarship for tuition and books received by a full-time...
objective risk excepr: O All fthe following are methods used by ingurance are methods used by insurance companies to A. safety education programs. C. investment in investment grade securities only D. use of deductibles. selective underwriting of insureds of: 7. A life insurance company needs more liquidity when selling a high proportion A. one-year renewable term policies B. annuities. C, thirty-year term policies D. whole life policies. one of the following statements about universal life insurance is not true? A....
Use the following to answer the next six questions: During the fiscal year ended December 31, 2017. the City of Johnstown issued 6% genera obligation serial bonds in the amount of $2.000.000 at 102 ($2.040,000) and used $1,980,000 of the proceeds to construct a fire station. The $40,000 premium was transferred to a debt service fund. The $20.000 left in the capital projects fund at the end of the project was later transferred to the debt service fund. The bonds...
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