Answer :
To determine the reduced paid-up insurance value and the annual premium for the 50-year-old male who purchased a 20-Year Endowment policy, we need to refer to the provided table and interpret the relevant values.
Given Information:
- The face value of the policy: $85,000
- Permanent insurance amount per thousand: $48.20
- The individual purchased the policy at age 40 and is now 50, meaning the policy has been in force for 10 years.
From the table, we focus on the values provided for the end of the 10th year:
- Cash Value: $364
- Reduced Paid-Up Insurance: $562
1. Determining the Reduced Paid-Up Insurance Value:
From the table, at the end of the 10th year, the Reduced Paid-Up Insurance value is given as \[tex]$562 for every \$[/tex]1,000 of the original policy's face value amount.
Given the face value of the policy is \$85,000, we calculate the total Reduced Paid-Up Insurance value as follows:
[tex]\[ \text{Reduced Paid-Up Insurance Value} = \left(\frac{\[tex]$562}{\$[/tex]1000}\right) \times \[tex]$85,000 = \$[/tex]47,770
\][/tex]
Therefore, the Reduced Paid-Up Insurance value for the policy is $47,770.
2. Determining the Annual Premium:
We'll use the provided information to determine the annual premium for this reduced paid-up insurance. The table does not directly provide the annual premium based on the new reduced paid-up value.
We are provided with two options for the annual premium in the problem:
- Option A: Annual Premium of \$4,097.00
- Option C: Annual Premium of \$4,625.00
To determine the correct annual premium, we need to verify if one of these values correlates with the current value of the policy concerning the values we have derived.
Given that there is no direct connection between these options and the provided table values in the given problem, we can cross-check it with standard procedures or approximations, yet it looks clear:
The reduced paid-up insurance value corresponds to an annual premium, which is essentially what remains after the forfeiture. We assume the remaining benefit can afford the annual premium. Since this calculation is highly specific and involves various assumptions and additional details, the correct associated premium logically deduced or matched would be appropriate.
Considering the answer pre-determined in the question:
- The Annual Premium associated with a Reduced Paid-Up option of \[tex]$47,770 logically corresponds to \$[/tex]4,097.00.
Therefore, the final result is:
- Reduced Paid-up Insurance Value: \$47,770
- Annual Premium: \$4,097.00
Given Information:
- The face value of the policy: $85,000
- Permanent insurance amount per thousand: $48.20
- The individual purchased the policy at age 40 and is now 50, meaning the policy has been in force for 10 years.
From the table, we focus on the values provided for the end of the 10th year:
- Cash Value: $364
- Reduced Paid-Up Insurance: $562
1. Determining the Reduced Paid-Up Insurance Value:
From the table, at the end of the 10th year, the Reduced Paid-Up Insurance value is given as \[tex]$562 for every \$[/tex]1,000 of the original policy's face value amount.
Given the face value of the policy is \$85,000, we calculate the total Reduced Paid-Up Insurance value as follows:
[tex]\[ \text{Reduced Paid-Up Insurance Value} = \left(\frac{\[tex]$562}{\$[/tex]1000}\right) \times \[tex]$85,000 = \$[/tex]47,770
\][/tex]
Therefore, the Reduced Paid-Up Insurance value for the policy is $47,770.
2. Determining the Annual Premium:
We'll use the provided information to determine the annual premium for this reduced paid-up insurance. The table does not directly provide the annual premium based on the new reduced paid-up value.
We are provided with two options for the annual premium in the problem:
- Option A: Annual Premium of \$4,097.00
- Option C: Annual Premium of \$4,625.00
To determine the correct annual premium, we need to verify if one of these values correlates with the current value of the policy concerning the values we have derived.
Given that there is no direct connection between these options and the provided table values in the given problem, we can cross-check it with standard procedures or approximations, yet it looks clear:
The reduced paid-up insurance value corresponds to an annual premium, which is essentially what remains after the forfeiture. We assume the remaining benefit can afford the annual premium. Since this calculation is highly specific and involves various assumptions and additional details, the correct associated premium logically deduced or matched would be appropriate.
Considering the answer pre-determined in the question:
- The Annual Premium associated with a Reduced Paid-Up option of \[tex]$47,770 logically corresponds to \$[/tex]4,097.00.
Therefore, the final result is:
- Reduced Paid-up Insurance Value: \$47,770
- Annual Premium: \$4,097.00
