Question 18

Rajesh is considering life insurance options.He has decided that $500,000 of life insurance coverage is appropriate for the financial situation of his loved ones in in the case that he dies and he is currently only 30 years old and in good health.He wonders how much money in total he will have given to the insurance company after years of paying them a premium - or in another sense, how much he would have been able to save if he had simply put the money in his savings account instead?Currently he earns 2.65% interest on his high-interest savings account so he's going to do the math based on that number, even though he knows the insurance money would probably make a higher return if the money was in their account.One option he is considering is "10 year term" insurance and the cost of that is $24.30 each month for the whole 10 year term.

How much money would he have in his savings account after 10 years if that's what he did with the money instead?

How much will ha have paid out of his own pocket after 10 year?

Question 19

Rajesh wants to shop around a bit so he also wants to consider "whole life" insurance which includes an investment element and still offers the same half a million in coverage.However, it's not cheap with the monthly cost being $257.40 for the rest of his life.

If he lives until he is 85 years of age, how much money would he have in his savings account if that's where he put his money instead?

How much will he have paid out of his own pocket after all of those years?