Post on 27-Mar-2015
Peace of Mind
Insurance can give you financial security and peace of mind, especially in case of unexpected expenses.
When do people use insurance?
Lesson Objective
Utilize tables to compute the annual premium for term life insurance.
Content Vocabulary
life insurancelife insurance
Financial protection for a family in case the main source of income dies.
life insurance
Financial protection for a family in case the main source of income dies.
term life insurance
beneficiary
term life insurance
Life insurance for a specified term, such as five years, or to a specified age.
term life insurance
Life insurance for a specified term, such as five years, or to a specified age.
beneficiary
The person who receives money from a life insurance policy if the insured dies.
beneficiary
The person who receives money from a life insurance policy if the insured dies.
Ken Calloway is 30 years old. He wants to purchase a $50,000, 5-year term life insurance policy.
What is his annual premium?
Example 1Example 1
Find the number of units purchased.
$50,000 ÷ $1,000 = 50 units purchased
Example 1 Answer: Example 1 Answer: Step 1Step 1
Refer to Figure 11.2 below.
Find the premium per $1,000.
Example 1 Answer: Example 1 Answer: Step 2Step 2
Male, age 30 = $2.47
Figure 11.2Figure 11.2
Find the annual premium.
Number of Units Purchased × Premium per $1,000
50 × $2.47 = $123.50
Example 1 Answer: Example 1 Answer: Step 3Step 3
Refer to Figure 11.2 above to find the annual premium for a 5-year term life policy.
Male, age 45. 5-year term life. $150,000 coverage.
What is the annual premium at age 45?
What will be the annual premium at age 50?
How much is the increase?
What is the percent increase?
Practice 1Practice 1
Annual premium at age 45: $625.50
Annual premium at age 50: $876
Amount of increase: $250.50
Percent increase: 40%
Practice 1 AnswerPractice 1 Answer
Refer to Figure 11.2 above to find the annual premium for a 5-year term life policy.
Heidi and Grant Hill are both 30 years old. They each purchase a 5-year term life insurance policy with $125,000 coverage.
What is Heidi’s annual premium?
What is Grant’s annual premium?
Practice 2Practice 2
Heidi’s annual premium: $266.25
Grant’s annual premium: $308.75
Practice 2 AnswerPractice 2 Answer