Life insurance premiums and comparison of types

Using the premium schedules provided in Exhibit 8.2, Exhibit 8.3, and Exhibit 8.5, how much in annual premium would a 25-year-old male have to pay for $100,000 of annual renewable term, level premium term, and whole life insurance? (Assume a 15-year term or period of coverage.) How much would a 25-year-old woman have to pay for the same coverage? (Hint: Use the average of the first and the last years' premiums in your calculations for the annual renewable term life insurance.) Round your answers to the nearest dollar.

	Annual Renewable Term	Level-Premium Term	Whole Life
Male	$	$	$
Female	$	$	$

Consider a 40-year-old male (or female): Using annual premiums, compute the total cost of 15 years of coverage under annual renewable and level premium term options and whole life insurance coverage. (Hint: Use the average of the first and the last years' premiums in your calculations for the annual renewable term life insurance.) Round your answers to the nearest dollar.

	Annual Renewable Term	Level-Premium Term	Whole Life
Male	$	$	$
Female	$	$	$

Relate the advantages and disadvantages of each policy type to their price differences.

WWW. Exhibit 8.2 Representative Annual Renewable Term Life Insurance Premiums: $100,000 Policy. Preferred Nonsmoker Rates When you buy term life insurance, you're buying a product that provides life insurance coverage and nothing more. This table shows representative rates for several age categories and selected policy years, actual premiums increase every year. As you can see, females pay less than males for commage, and promiums increase sharply with age. Age 25 Age 40 Age 60 Policy Year Male Female Male Female Male Female $95 $ $105 $ 306 5 $97 $ 63 $177 5151 $ 732 $ 570 $100 SSB 5194 $1.278 5165 $117 $299 5236 $2.207 $1.620 $177 $151 $429 5308 $3,988 $2.902 1 10 3237 15 20 Ace Exhibit 8.3 Representative Level Premium Term Life Rates: $100,000 Preferred Nonsmoker Policy This table shows representative annual premiums for $100.000 af level premium tem life insurance. Although level premium costs less than annual renewable term for the same period, you must requality at the end of each term to retain the low premium 10 Year 15 Year 20 Year 30 Year Age Male/Female Male/Female Male/Female Male/Female 25 5106/5102 $1165110 51295116 $161/5143 $100/5102 $117/5112 $134/5125 $175/5152 $122/5115 $135/5129 $157/5145 $272/5185 50 $200/5171 $250/5199 5290/5233 $475/5341 S403/5300 $539/33/3 SOCS5502 Not Available 35 40 B0 SUREN ANSCHOT Exhibit 8.5 Representative Whole Life Insurance Annual Premiums: $100,000 Policy. Preferred Nonsmoker Rates Like any life insurance product, whole life is more expensive the older you are Also, whole life is more costly than term because you're getting an investment/savings account represented by the tal cash value column in addition to life insurance coverage Premiums Pald through Total Cash Value Pald-Up Insurance at Annual Premium Year 20 at Year 20 Year 20 Age Male Female Mate Female Male/Female Female 25 $ 600 $ 525 $12.060 $10.580 $10,670 $55,700 $56.200 30 $ 727 $ om $14.540 $12.750 $19,510 $57,500 550.000 35 $ 991 $775 $17.900 $15.500 16,908 SEB,900 $60.600 $1,078 $ 931 $21.560 $18.620 520,518 500,000 $62,300 50 51,590 $1.267 $31.00 527340 $29.796 562,300 $65.300 60 $2,418 $2,050 348.360 341,000 $41,796 586,260 S68.800 The whole policy is campeonat pays, so the swego podupe mounts and greed Male 40