Question

Calculate the following nonforfeiture options for Lee Chin, age 42, who purchased a $200,000 straight- life policy. At the end of year 20, Lee stopped paying premiums. Cash surrender value - Reduced paid-up insurance- Extended term insurance-

Answer 1

Detailed Information Purchased value is $200,000 Time period is 20 years At the end of 15 years, he was stopped paying premium:s Face value of Nonforfeiture option is $1,000 Note: According to the Table (detailed information is presented in the table), here the calculations were done. Straight Life 0-Payment Lite 0Year Endowment Term ash Value Amount of peidupinsurance YearsDeyCesh Value Amount of Paid-up Insurance Years Day 19 190 28 1319 32 176610 Cash valueAmount of paid-up 9 97 18 76186 20 5317 21 300475 220 521 81 1000 Years Dys 23 | 140 30 160 35 300 148 371 265 1000 1000 Calculate the Cash Surrender value According to the above presented table; here the cash value is given for 20 years period i:s 265; paid-up insurance value for 20-years period is 550 and Number of days is 300 days $200,000 $1,000 53,000 Cash surrender value-x265 Therefore, the Cash surrender value is S53,000

Calculate the Reduced paid-up insurance amount: $200,000 $1,000 Cash surrender valuex550 -$110,000 Calculate the Extended term insurance: Therefore, according to the above presented table, here the extended term insurance for 20-years period is 300 days