Question

tim tradesman pays 2000 annually for 125000 worth of life insurance. what is the cash value of the pilicy after ten years?

Answer 1

a. 2,000*10 years=20,000
b. 150,000=150 units of insurance. so 150 * 89(because cash value per unit for 10 years is 89)
=13,350
c. 66.75%

Answer 2

Cash value of the policy after 10 years = 11125

Explanation:

Worth of life insurance = 125000

1 unit = $1000

$ 125000 = 125 units

And according to thumb rule : Cash Value of 1 unit during 10 years is equivalent to $89

Time duration in years = 10 years

Therefore, Cash value of the policy after 10 years = 125 × 89

= 11125

Hence, Cash value = 11125