Question: Richard age 45 is married with two children in high
Richard, age 45, is married with two children in high school. He estimates that his average annual earnings over the next 20 years will be $60,000. He estimates that one-third of his average annual earnings will be used to pay taxes, insurance premiums, and the costs of self-maintenance. The remainder will be used to support his family. Richard wants to calculate his human life value and believes a 6 percent discount rate is appropriate. The present value of $1 payable for 20 years at a discount rate of 6 percent is $11.47. Calculate Richard's human life value.
Relevant Questionsa. The human life value is one method for estimating the amount of life insurance to own. Keeping all other factors unchanged explain the effect, if any, of each of the following:1. The discount rate used to calculate the ...a. Explain the meaning of premature death.b. Identify the costs associated with premature death.c. Explain the economic justification for the purchase of life insurance.a. What is a variable universal life insurance policy?b. How does variable universal life insurance differ from a typical universal life insurance policy?c. Identify the various expense charges that policyholders must pay ...Briefly explain the following life insurance contractual provisions.a. Suicide clauseb. Grace periodc. Reinstatement clausea. Describe the incontestable clause in a life insurance policy.b. What is the purpose of the incontestable clause?
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