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: $1,900

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