Question

Grace's employer is now offering group-term life insurance. The company will provide each employee with $120,000 of group-term life insurance. It costs Grace's employer $680 to provide this amount of insurance to Grace each year. Assuming that Grace is 37 years old, use the table to determine the monthly premium that Grace must include in income as a result of receiving the group-term life benefit.

EXHIBIT 12-08 Uniform Premiums for $1,000 of Group-Term Life Insurance Protection

5-Year Age Bracket	Cost per $1,000 of Protection for One Month
Under 25	$0.05
25 to 29	0.06
30 to 34	0.08
35 to 39	0.09
40 to 44	0.10
45 to 49	0.15
50 to 54	0.23
55 to 59	0.43
60 to 64	0.66
65 to 69	1.27
70 and above	2.06

Multiple Choice

• $6.30.

• $13.90.

• $0.

• $50.77.

Answer 1

IF YOU HAVE ANY DOUBTS COMMENT BELOW I WILL BE TTHERE TO HELP YOU..ALL THE BEST..

So first we need to know that the firs $50000 yo u pay for the group term life insurance is excluded from the employees taxable income

so the group life insurance amount taxable will only be =$120000-50000=$70000

At 3 years of age we have premium of 9% for every 1000 dollars protection for the month

So the monthly premium needed to be included will be

($120000-50000)*9%*1/$1000= $6.3

I HOPE YOU UNDERSTAND..

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