Problem 121 Calculating Life Expectancy [LO12-1] Using: Exhibit 12-2: determine the life expectancy of a 65-year-old male. Note: Ror yor answer to 1 decimal place. Source: CDC/NCHS, "National Vital Statistics Report," Volume 65 Problem 12-4 Calculating the Amount of Life Insurance Needed Using the Multiple of Income Method [LO12-2] You have a gross annual income of $71,000. Use the multiple of income method to determine the minimum amount of iffe insurance you should carry. Problem 12-6 Calculating the Amount of Life Insurance Needed Using the Easy Method [ LO12-2] You are the wage earner in a "typical family," with $72,000 gross annual income. Use the easy method to determine how much life insurance you should carry. Note: Do not round intermediate calculations. Problem 12-8 Estimating Life Insurance Needs Using the DINK Method [LO12-2] You and your spouse are in good health and have reasonably secure jobs. Each of you makes about $40,000 annually. You own a home with a $75,000 mortgage, and you owe $16,200 on car loans, $9,400 in personal debt, and $3,950 in credit card loans. You have no other debt. You have no plans to increase the size of your family in the near future. You estimate that funeral expenses will be \$8.500. Estimate your total insurance needs using the DINK method. Problem 12-10 Using the "Nonworking" Spouse Method to Determine Life Insurance Needs [LO12-2] Tim and Allison are married and have two children, ages 6 and 7. Allison is a "nonworking" spouse who devotes all of her time to household activities. Estimate how much life insurance Tim and Allison should carry to cover Allison. Problem 12-13 Calculating the Effect of Inflation on a Life Insurance Policy [LO12-4] Susan has purchased a whole life policy with a death benefit of $240,000. Assuming that she dies in 8 years and the average inflation has been 5 percent, what is the value of the purchasing power of the proceeds? Use (Exhibit 1-A. Exhibit 1-8. Exhibit 1-C. Exhibit t-D) Note: Use appropriate factor(s) from the tables provided. Round time value factor to 3 decimal places and final answer to 2 Problem 12-15 Determining the Cost of Insurance [LO12-5] Suppose you are 45 and have a $350,000 face amount, 15-year, limited-payment, participating policy (dividends will be used to buld up the cash value of the policy). Your annual premium is $1,225. The cash value of the policy is expected to be $14,000 in 15 years. Using time value of money and assuming you could invest your money elsewhere for a 7 percent annual yleld, calculate the net cost of insurance. Use (Exhibit 1-A. Exhibit 1-B. Exhibit 1-C. Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round time volue factor to 3 decimal places and final answer to the nearest whole number. Problem 12-17 Calculating a Mortality and Expense Risk Charge [LO12-6] Your variable annuity has a mortality and expense risk charge at an annual rate of 1.30 percent of account value. Your average account value during the year is $20,000. What are your mortality and expense risk charges for the year? Problem 12-18 Calculating Administrative Fees [LO12-6] Your variable annuity charges administrative fees at an annual rate of 0.25 percent of account value. Your average account value during the year is $100,000. What is the administrative fee for the year? Problem 12-4 Calculating the Amount of Life Insurance Needed Using the Multiple of Income Method [LO12-2] You have a gross annual income of $71,000. Use the multiple of income method to determine the minimum amount of iffe insuranci you should carry. Problem 12-4 Calculating the Amount of Life Insurance Needed Using the Multiple of Income Method [LO12-2] You have a gross annual income of $71,000. Use the multiple of income method to determine the minimum amount of ilfe insuranct you should carry