Question

In: Finance

Which of the following policies purchased at age 35 would provide the highest cash value at age 65?

Which of the following policies purchased at age 35 would provide the highest cash value at age 65?


whole life policy.

paid up at 65 life policy.

term insurance to age 65.

paid up at age 70 whole life policy.

Solutions

Expert Solution

Option b Paid up at 65 life policy is correct. Paid up at 65 life policy if purchased at 35 will provide the highest cash value at the age of 65.

A Paid up at 65 life policy gives a facility to policyholder to pay the premium until he/she reaches the age of 65.After reaching the age of 65 nothing is to be paid in the name of premium or by any other name.This reduces the burden of the policyholder when he/ she reaches at the age of 65.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Diana has an insurance policy with a cash value at age 65 that will provide payments...
Diana has an insurance policy with a cash value at age 65 that will provide payments of $1500 a year for 15 years, first payment at age 66. If the insurance company pays j1 = 5% on its funds, what is the cash value at age 65?
Which of the following investments would have the highest future value at the end of 10...
Which of the following investments would have the highest future value at the end of 10 years? Which has the highest present value today? Rank the choices below from highest to lowest present value. Assume that the effective annual interest rate for all investments is the same and is greater than zero. Investment A pays $250,000 at the beginning of every year for the next 10 years (a total of 10 payments). Investment B pays $125,000 at the end of...
Which of the following investments would have the highest future value at the end of 10...
Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same and is greater than zero. a. Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments). b. Investment E pays $250 at the end of every year for the next 10 years (a total of 10 payments). c. Investment A...
A client, 35 years old, who would like to retire at age 65 (30 years from...
A client, 35 years old, who would like to retire at age 65 (30 years from today). Her goal is to have enough in her retirement account to provide an income of $75,000 a year, starting a year after retirement or year 31, for 25 years thereafter. She had a late start on saving for retirement, with a current balance of $10,000. To catch up, she is now committed to saving $5,000 a year, with the first contribution a year...
Assuming a discount rate of 6 percent, which of the following has the highest cash value...
Assuming a discount rate of 6 percent, which of the following has the highest cash value (present value at the date of purchase)? Assume all purchase options below are as at the same date. There will be a single cash flow for all of the alternatives (balloon payments at the end of the financing period). a. $90,000 in 3 years b. $60,000 today c. $120,000 in 8 years d. $100,000 in 5 years
1. Which of the following bonds would have the highest percentage change in value if all...
1. Which of the following bonds would have the highest percentage change in value if all interest rates in the economy decrease by 1%? Group of answer choices 20-year, zero coupon bond. 20-year, 5% coupon bond. 10-year, zero coupon bond. 1-year, 10% coupon bond. 20-year, 10% coupon bond. 2. Suppose you are signing a loan contract of $65,000 at an interest rate of 8.5%. You must make 5 equal payments at the end of the year for 5 years. How...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally,...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally, Mike would like to retire with $1,000,000.00. (Input all answers as positive values, no commas, with no symbols ex. no $ or %. Input all % answers as whole numbers without symbols ex. 10.03 for .1003. Input all final answers two decimal places out.) How much would Mike have to deposit on an annual basis to reach his goal if he can get a...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally,...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally, Mike would like to retire with $1,000,000.00. (Input all answers as positive values, no commas, with no symbols ex. no $ or %. Input all % answers as whole numbers without symbols ex. 10.03 for .1003. Input all final answers two decimal places out.) How much would Mike have to deposit on a monthly basis to reach his goal if he can get a...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally,...
Mike is currently 35 years old and plans on retiring at the age of 65. Ideally, Mike would like to retire with $1,000,000.00. (Input all answers as positive values, no commas, with no symbols ex. no $ or %. Input all % answers as whole numbers without symbols ex. 10.03 for .1003. Input all final answers two decimal places out.) If Mike can only find an annual return of 8% compounded on a monthly basis and can only deposit $400...
Mike is currently 35 years old and plans on retiring at the age of 65 ideally...
Mike is currently 35 years old and plans on retiring at the age of 65 ideally Mike would like to retire with one million dollars. a. How much would Mike have to deposit on an annual basis to reach his goal if he can get return of 12% compounded annually.? b. How much would mike deposit on a monthly basis to reach his goal if he can get a return of 10% compounded monthly? c. If mike can find an...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT