term life insurance
DESCRIPTION
SECTION. 11-3. pp. 378-380. Term Life Insurance. Utilize tables to compute: annual premium for term life insurance. Section Objective. Key Words to Know. life insurance (p. 378) Financial protection for a family in case a family member dies. term life insurance (p. 378) - PowerPoint PPT PresentationTRANSCRIPT
Term Life Insurance pp. 378-38011-3SECTIONSECTION
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Section ObjectiveSection ObjectiveUtilize tables to compute:
• annual premium for term life insurance
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life insurance (p. 378)
Financial protection for a family in case a family member dies.
term life insurance (p. 378)
Life insurance for a specified term, such as five years, or to a specified age, that ends unless the policy is renewed.
Key Words to KnowKey Words to Know
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beneficiary (p. 378)
A person who receives the money from life insurance if the insured dies.
Key Words to KnowKey Words to Know
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Annual = Number of Units × PremiumPremium Purchased per $1,000
Formula Formula
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Insuring Your Life p. 378Insuring Your Life p. 378
What is the difference between term and life insurance?
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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
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Find the number of units purchased.
$50,000 ÷ $1,000 = 50 units purchased
Example 1 Answer: Example 1 Answer: Step 1Step 1
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Refer to Figure 11.2 below.
Find the premium per $1,000.
Example 1 Answer: Example 1 Answer: Step 2Step 2
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Male, age 30 = $2.47
Figure 11.2Figure 11.2
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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
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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
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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
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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
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Heidi’s annual premium: $266.25
Grant’s annual premium: $308.75
Practice 2 AnswerPractice 2 Answer
Term Life Insurance11-3END OF SECTIONEND OF SECTION