Ten years ago Jasmine (52) purchased a $200,000 whole life policy with an annual premium of $1,735.
Question:
Ten years ago Jasmine (52) purchased a $200,000 whole life policy with an annual premium of $1,735. Five days ago, Jasmine died in a fatal car accident. Jasmine did not pay her premium which was due 15 days ago. During the claim underwriting process, it has been discovered that an administration error caused the age on the policy to be wrong (38) and the premium wrong. Jasmine's annual premiums should have been $2,027. Two years ago, Jasmine took a policy loan out for $10,000 at an annual compounded interest of 4% and has not made any payments. Ignoring any policy fees, what will the death benefit be?
a). $158,638
b). $160,373
c). $171,189
d). $187,112
South western Federal Taxation 2017 Essentials of Taxation Individuals and Business Entities
ISBN: 9780357109144
20th edition
Authors: William A. Raabe, David M. Maloney, James C. Young, Annette Nellen