For a fully discrete whole life on (50) with a death benefit of 100,000, you are given:
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- For a fully discrete whole life on (50) with a death benefit of 100,000, you are given:
- (i) The gross premium paid annually is 1100.
- (ii) The reserve at the end of the 9th year is 10,000
- (iii) The reserve at the end of the 10th year is 11,000.
- (iv) The reserve at the end of the 11th year is 12,000.
- (v) Cash values are 85% of the reserves.
- (vi) Mortality follows the Standard Ultimate Life Table.
- (vii) Withdrawals are 15% in the first year and 4% all years thereafter.
- (viii) The interest rate earned is 8% in all years.
- (ix). Issue expenses are 50% of the premium.
- (x). Maintenance expenses are 7% of premium plus 60 per policy in all years including the first year.
- Calculate the profit in the 10th year assuming the policy was in force at the start of the year.
Related Book For
Managerial Accounting Creating Value in a Dynamic Business Environment
ISBN: 978-0078110917
9th edition
Authors: Ronald W. Hilton
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