Compute the annual surrender cost index

Reference no: EM132029919

Question: A participating ordinary life policy in the amount $10,000 is sold to an individual, age 35. The cost data given: Annual premium $230 Total dividends for 20 years $1613 Cash value at the end of 20 years $3620 Accumulated value of the annual premium at 5 percent for 20 years is $7985 Accumulated value of the dividends at 5 percent for 20 years is $2352 Amount to which $1 deposited annually at the beginning of each year will accumulate in 20 years at 5 percent is $34719

a. Based on this information, compute the annual net cost per $1000 of life insurance at the end of 20 years using the traditional net cost method.

b. Compute the annual surrender cost index per $1000 of life insurance at the end of 20 years.

c. Compute the annual net payment cost index per $1000 of life insurance at the end of 20 years.

Reference no: EM132029919

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