For all types of cash value life insurance, part of each premium, is used to make payments on the protection element of the contract. The protection element of the contract has an expected return which is equal to: A the probability of death multiplied by the increase in premium amount. B the face value multiplied by return in investment. C the probability of death multiplied by the amount of protection. D the premium amount multiplied by the returns on investment. E the increase in premium amount multiplied the amount of protection.
Added by Pedro H.
Close
Step 1
Step 1: The expected return on the protection element of a cash value life insurance contract is equal to the probability of death multiplied by the amount of protection. Show more…
Show all steps
Your feedback will help us improve your experience
Breanna Ollech and 57 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Life Insurance A 32-year-old woman purchases a $200,000 term life insurance policy for an annual payment of $440. Based on a period life table for the U.$ government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems.
Breanna O.
A 35-year-old woman purchases a $300,000 term life insurance policy for an annual payment of $420. Based on the period life table for the U.S. government, the probability that she will survive the year is 0.999057. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems. The expected value of the policy for the insurance company is $
Joanna Q.
Which of the following is NOT necessary in order for a product to be defined as life insurance for federal income tax purposes? A) The death benefit B) The cash value accumulation test C) The guideline premium and corridor test D) The earned premium test
Akash M.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD