Morgan Hanna 3 . Morgan Hanna is a thirty - two - year- old nurse . She is in good health and has applied for a new* cash value life insurance policy . She is interested in knowing whether she should surrender* her current policy and purchase the new policy offered through a AAA- rated firm . If all of the contract and company characteristics are similar , and the current face value of her policy is sufficient , should she maintain or replace her current policy ? Assume the following factors :" . Yearly premium : $1, 90.0 Cash value at the beginning of the period : $13, 456 Cash value at the end of the period : $13.927 . Projected after - tax rate of return : 3.50 percent . Current policy dividend : $350 . Death benefit : $200, 000