Kenji is a 34-year-old lawyer who just bought a universal life insurance policy to protect his two children (ages 5 and 6) in the event of his death. Each year, Kenji chooses how much he would like to contribute to the policy, as shown in the first row of the following table. An administrative fee along with the cost of the death benefit (thepure insurance portion of the policy) issubtracted from the payment. The resulting amount goes into the cash-value (orsavings ) portion of the policy. This money earns interest at amarket-based rate of return. Based on the given information, calculate the amount that is added to the cash-value portion of the policy in each of the first three years.

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Understanding Cash Value Accumulation In universal life insurance policies a portion of your premium ... View the full answer