Margie Rale, age 38, a well-known actress, decided to take out a limited-payment life policy. She chose this since she expects her income to decline in future years. Margie decided to take out a 20-year payment life policy with a coverage amount of $89,000. (Use Table 9.1 and Table 9.2.) (for females subtract 3 years from the table).

TABLE 9.1 Five-year term Straight life Twenty-year endowment Age Age Twenty- payment life Age Age 20 1.85 20 5.90 20 8.28 20 13.85 Life insurance rates per $1,000 for males (for females, subtract 3 years from the age)? 21 1.85 21 6.13 21 8.61 21 14.35 22 1.85 22 6.35 22 8.91 22 14.92 23 1.85 23 6.60 23 9.23 23 15.54 24 1.85 24 6.85 24 9.56 24 16.05 25 1.85 25 7.13 25 9.91 25 17.55 26 1.85 26 7.43 26 10.29 26 17.66 27 1.86 27 7.75 27 27 18.33 10.70 11.12 28 1.86 28 8.08 28 28 19.12 29 1.87 29 8.46 29 11.58 29 20.00 30 1.87 30 8.85 30 12.05 30 20.90 21.88 31 1.87 31 9.27 31 12.57 31 32 1.88 9.71 32 13.10 32 22.89 33 1.95 10.20 33 13.67 33 23.98 32 33 34 35 34 2.08 10.71 34 14.28 34 25.13 35 2.23 11.26 35 14.92 35 26.35 27.64 36 2.44 36 11.84 36 15.60 36 37 2.67 37 12.46 37 16.30 37 28.97 38 2.95 38 13.12 38 38 30.38 17.04 17.81 39 3.24 39 13.81 39 39 31.84 40 3.52 40 14.54 40 18.61 40 33.36 41 3.79 41 15.30 41 19.44 41 34.94 42 4.04 42 16.11 42 20.31 42 36.59 43 4.26 43 16.96 43 43 38.29 21.21 22.15 44 4.50 44 17.86 44 44 40.09 TABLE 9.2 Nonforfeiture options based on $1,000 face value STRAIGHT LIFE 20-PAYMENT LIFE 20-YEAR ENDOWMENT EXTENDED TERM EXTENDED TERM EXTENDED TERM Years insurance policy in force Cash value Amount of paid-up insurance Cash value Amount of paid-up insurance Amount of paid-up insurance Cash value Years Day Years Day Years Day 5 29 86 9 91 92 229 23 140 10 96 259 18 76 15 148 371 20 165 71 220 19 190 186 521 28 195 317 781 32 176 475 1,000 Life Option 2: Reduced paid-up insurance $200,000 $1,000 200 x $371 = $74,200 20 265 550 21 300 319 520 30 160 610 790 35 300 1,000 1,000 Life Option 3: Extended term insurance Bob could continue this $200,000 policy for 20 years and 165 days. Option I: Cash value $200,000 200 x $148 = $29,600 $1,000 TABLE 9.1 Five-year term Straight life Twenty-year endowment Age Age Twenty- payment life Age Age 20 1.85 20 5.90 20 8.28 20 13.85 Life insurance rates per $1,000 for males (for females, subtract 3 years from the age)? 21 1.85 21 6.13 21 8.61 21 14.35 22 1.85 22 6.35 22 8.91 22 14.92 23 1.85 23 6.60 23 9.23 23 15.54 24 1.85 24 6.85 24 9.56 24 16.05 25 1.85 25 7.13 25 9.91 25 17.55 26 1.85 26 7.43 26 10.29 26 17.66 27 1.86 27 7.75 27 27 18.33 10.70 11.12 28 1.86 28 8.08 28 28 19.12 29 1.87 29 8.46 29 11.58 29 20.00 30 1.87 30 8.85 30 12.05 30 20.90 21.88 31 1.87 31 9.27 31 12.57 31 32 1.88 9.71 32 13.10 32 22.89 33 1.95 10.20 33 13.67 33 23.98 32 33 34 35 34 2.08 10.71 34 14.28 34 25.13 35 2.23 11.26 35 14.92 35 26.35 27.64 36 2.44 36 11.84 36 15.60 36 37 2.67 37 12.46 37 16.30 37 28.97 38 2.95 38 13.12 38 38 30.38 17.04 17.81 39 3.24 39 13.81 39 39 31.84 40 3.52 40 14.54 40 18.61 40 33.36 41 3.79 41 15.30 41 19.44 41 34.94 42 4.04 42 16.11 42 20.31 42 36.59 43 4.26 43 16.96 43 43 38.29 21.21 22.15 44 4.50 44 17.86 44 44 40.09 TABLE 9.2 Nonforfeiture options based on $1,000 face value STRAIGHT LIFE 20-PAYMENT LIFE 20-YEAR ENDOWMENT EXTENDED TERM EXTENDED TERM EXTENDED TERM Years insurance policy in force Cash value Amount of paid-up insurance Cash value Amount of paid-up insurance Amount of paid-up insurance Cash value Years Day Years Day Years Day 5 29 86 9 91 92 229 23 140 10 96 259 18 76 15 148 371 20 165 71 220 19 190 186 521 28 195 317 781 32 176 475 1,000 Life Option 2: Reduced paid-up insurance $200,000 $1,000 200 x $371 = $74,200 20 265 550 21 300 319 520 30 160 610 790 35 300 1,000 1,000 Life Option 3: Extended term insurance Bob could continue this $200,000 policy for 20 years and 165 days. Option I: Cash value $200,000 200 x $148 = $29,600 $1,000