Mr XYZ is self-employed. Last year, his business generated a pro t of GH ¢50,000. He also receives dividend of GH ¢3,000 paid by a multinational company where he is shareholder. He contacts you to purchase a life insurance plan because he has a serious underlying medical condition.

(i) As an insurance broker, what is the right insurance plan Mr. XYZ should purchase and explain how you will convince Mr. XYZ to purchase the insurance plan chosen.

(ii) Write the present value of the cash ow of the insurance plan purchase in (i) with the premium you will charge.

Answer rating: 100% (QA)

1 In this case Mr XYZ is earning through profits dividends as Pa... View the full answer