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The premiums paid on a whole life cash policy are divided into two parts; the first part pays for the actual premium of the life
The premiums paid on a whole life cash policy are divided into two parts; the first part pays for the actual premium of the life insurance policy and the second part is retained in a cash fund. As the policy matures, the portion of the policy premium used to pay for the life insurance policy decreases in amount while the portion funding the cash fund increases. Your instructor compared this model to which of the following financial transactions: A purchase of a company's stock whereby the dividend payment varies over time and the appreciated lump sum received by the owner at the sale of the stock is a repayment of the initial amount invested. A house mortgage whereby the interest portion of the monthly payment decreases with time while the repayment of the principal amount increases with time A bond coupon payment where the coupon payment remains the same and the principal is paid back at the end of the bond's term A car loan given the short term nature of the loan which is similar to that of a whole life cas
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