Mary is now age 72 exactly. She has just purchased a term insurance policy which will pay a sum insured of $200,000 at the end of the year of death, as long as she dies before the end of 5 years. What is the present value of the expected value of payments? Answer: Susan and Beth are sisters. Susan is age 72 and Beth is age 74. They have purchased a joint life annuity which will pay $30,000 at the end of each year, as long as BOTH of the sisters are alive at the date of payment. That is, payments may occur at t = 1,2,3... as long as both women are alive at the payment date. What is the present value of the expected payments? Answer: Patty and Louise are sisters who are both age 75. They have purchased a last-survivor annuity, which will pay $50,000 at the end of each year as long as at least one of them is alive at the payment date. That is, the payment of $50,000 will be made if Patty is alive, or if Louise is alive, or if they are both alive. No payment will be made if both women are dead at the payment date. What is the present value of the expected payments? Answer: Alison and Barbara are two sisters who are both age 72. on Alison is entitled to receive an income of $10,000 at the end of each year. After Alison dies, the same amount will be paid to Barbara. That is, payments of $10,000 will be made to Barbara at times t = 1,2,3...., as long as Alison has died before that time and Barbara is alive at that time. Barbara's benefit is called a reversionary benefit - she only receives these payments after Alison has died. What is the present value of the expected payments? Answer: a