An Insured 26 Year Old Purchased a $35,000, 20-Year Endowment

question 32

Short Answer

An insured 26 year old purchased a $35,000, 20-year endowment policy with premiums payable quarterly. How much more did the insured pay the insurance company during her lifetime than she would have paid had she chosen annual premium payments? Refer to Table 12-1. (1 year = 12 months.)​

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Definitions:

Single Payment

A one-time transaction to settle a liability or complete a purchase.

Interest Annually

Interest annually refers to interest that is calculated and added to the principal balance once per year.

Term Deposit

A bank deposit that has a fixed term and typically offers a higher interest rate than savings accounts.

Credit Union

A member-owned financial cooperative that provides traditional banking services.