nd Study Tools ters tions eccess Tips scess Tips Chapter 8 Financial Planning Exercise 6 Life Insurance premiums and comparison of types EXHIBIT 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years; actual premiums increase every year. As you can see, Temales pay less than males for coverage, and premiums increase sharply with age. AGE 25 AGE 40 Policy Year Male Female Male Female $164 $143 $180 5178 5 $167 5150 $228 $225 10 $174 $163 $297 $264 15 $186 $126 $388 $330 20 $228 $225 $550 $443 EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy OR YOU 1 nking Thiela chrono og and Study Tools her Offers al Options Be Success Tips Success Tips ED FOR YOU EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100,000 of level premium termite Insurance. Although level premium costs less than annual renewable term for the same period, you must requality at the end of each term to retain the low premium 10 YEAR 15 YEAR Age Male/Female Male/Female 25 $120/5108 $120/5106 35 $125/8120 $131/$122 40 $144/5135 $154/5145 50 $216/$185 5257/5213 60 5450/5324 $567/5412 EXHIBIT 8.5 Representative Whole Life Insurance Annual Premiums: $100,000 Policy, Preferred Nonsmoker Rates Like any life insurance product, whole life is more expensive the older you are. Also, whole life is more costly than term because you're getting an investment/savings account, represented by the total cash value column, in addition to life insurance coverage ANNUAL PREMIUM Age Male Female 25 $1,057 $956 30 51,218 51,099 35 $1,454 $1,278 40 $1.249 51.499 Thinking edback x dy Tools Tips represented by the total con valve column, in addition to life insurance coverage. ANNUAL PREMIUM Age Male Female 25 $1,057 5956 30 $1,218 $1,099 35 $1,454 51,278 40 $1,749 51,499 50 $1,200 $2,183 60 $4,509 $3,562 Using the premium schedules provided in Exhibit 3.2, 3.3, and 1.5, how much in annual premium would a 25-year-old male have to pay for $100,000 of annual renewable term, leve premium term, and whole life insurance (Assume a 15-year term or period of coverage.) How much would a 25-year-old woman have to pay for the same coverage Round your answers to the nearest dollar. Annual Renewable Term Lavel Premium Term Whole Life Mole Female Consider a 40-year-old male (or female): Using annual premiums, compute the total cost of 10 years of coverage under annual renewable and level premium term options and whole life insurance coverage Relate the advantages and disadvantages of each policy type to the price differences. Round your answers to the nearest dollar OU Annual Renewable Term Level-Premium Term Whole Life Male Female Using the premium schedules provided in Exhibit 8.2, 8.3, and 8.5, how much in annual premium would a 25-year-old male have to pay for $100,000 of annual renewable term, lovel premium term, and whole life insurance? (Assume a 15-year term or period of coverage.) How much would a 25-year-old woman have to pay for the same coverage? Round your answers to the nearest dollar. Annual Renewable Term Level-Premium Term Whole Life Male Female Consider a 40-year-old male (or female) Using annual premiums, compute the total cost of 10 years of coverage under annual renewable and level premium term options and whole or insurance coverage. Relate the advantages and disadvantages of each policy type to their price differences. Round your answers to the nearest dollar. Annual Renewable Term Level-Premium Term Whole Life Male Female nd Study Tools ters tions eccess Tips scess Tips Chapter 8 Financial Planning Exercise 6 Life Insurance premiums and comparison of types EXHIBIT 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years; actual premiums increase every year. As you can see, Temales pay less than males for coverage, and premiums increase sharply with age. AGE 25 AGE 40 Policy Year Male Female Male Female $164 $143 $180 5178 5 $167 5150 $228 $225 10 $174 $163 $297 $264 15 $186 $126 $388 $330 20 $228 $225 $550 $443 EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy OR YOU 1 nking Thiela chrono og and Study Tools her Offers al Options Be Success Tips Success Tips ED FOR YOU EXHIBIT 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100,000 of level premium termite Insurance. Although level premium costs less than annual renewable term for the same period, you must requality at the end of each term to retain the low premium 10 YEAR 15 YEAR Age Male/Female Male/Female 25 $120/5108 $120/5106 35 $125/8120 $131/$122 40 $144/5135 $154/5145 50 $216/$185 5257/5213 60 5450/5324 $567/5412 EXHIBIT 8.5 Representative Whole Life Insurance Annual Premiums: $100,000 Policy, Preferred Nonsmoker Rates Like any life insurance product, whole life is more expensive the older you are. Also, whole life is more costly than term because you're getting an investment/savings account, represented by the total cash value column, in addition to life insurance coverage ANNUAL PREMIUM Age Male Female 25 $1,057 $956 30 51,218 51,099 35 $1,454 $1,278 40 $1.249 51.499 Thinking edback x dy Tools Tips represented by the total con valve column, in addition to life insurance coverage. ANNUAL PREMIUM Age Male Female 25 $1,057 5956 30 $1,218 $1,099 35 $1,454 51,278 40 $1,749 51,499 50 $1,200 $2,183 60 $4,509 $3,562 Using the premium schedules provided in Exhibit 3.2, 3.3, and 1.5, how much in annual premium would a 25-year-old male have to pay for $100,000 of annual renewable term, leve premium term, and whole life insurance (Assume a 15-year term or period of coverage.) How much would a 25-year-old woman have to pay for the same coverage Round your answers to the nearest dollar. Annual Renewable Term Lavel Premium Term Whole Life Mole Female Consider a 40-year-old male (or female): Using annual premiums, compute the total cost of 10 years of coverage under annual renewable and level premium term options and whole life insurance coverage Relate the advantages and disadvantages of each policy type to the price differences. Round your answers to the nearest dollar OU Annual Renewable Term Level-Premium Term Whole Life Male Female Using the premium schedules provided in Exhibit 8.2, 8.3, and 8.5, how much in annual premium would a 25-year-old male have to pay for $100,000 of annual renewable term, lovel premium term, and whole life insurance? (Assume a 15-year term or period of coverage.) How much would a 25-year-old woman have to pay for the same coverage? Round your answers to the nearest dollar. Annual Renewable Term Level-Premium Term Whole Life Male Female Consider a 40-year-old male (or female) Using annual premiums, compute the total cost of 10 years of coverage under annual renewable and level premium term options and whole or insurance coverage. Relate the advantages and disadvantages of each policy type to their price differences. Round your answers to the nearest dollar. Annual Renewable Term Level-Premium Term Whole Life Male Female