A Client, Age 25, Is Considering Purchasing a 20-Payment Life

question 16

Short Answer

A client, age 25, is considering purchasing a 20-payment life policy with annual payments. He wants to know how much more he will have paid the insurance company in premiums per $1,000 coverage during the 20-year period than he can borrow on the policy at the end of the 20 years. Compute how much more the client will have to pay per thousand. Refer to Tables 12-1 and 12-2. (1 year = 12 months.)​

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Definitions:

Monetary Transfers

Financial transactions that involve the movement of money from one party to another, which can be domestic or international in nature.

Fund Balance―Nonspendable

The portion of a government's fund balance that cannot be spent because it is either not in spendable form or legally or contractually required to be maintained intact.

General Fund

A primary accounting fund used by a government to record its general operating revenues and expenses.

Fund Balance

The net assets of a governmental fund calculated as the difference between fund assets and liabilities, reflecting the financial position of the fund.