Question

The beneficiary of a life insurance policy is the person who receives the payment of the amount of insurance after the death of the insured. Todd is establishing his beneficiaries for his life insurance policy. The policy is for $150,000. His daughter will get 1/3 of his policy, his stepson will get 1/4 of his policy, and the rest will go to his grandson. What dollar amount will his grandson receive?

a) $50,000
b) $62,500
c) $75,000
d) $87,500

Answer 1

Todd's grandson will receive $62,500 from the life insurance policy, after Todd's daughter receives $50,000 (1/3 of the policy) and the stepson receives $37,500 (1/4 of the policy).

Step-by-step explanation:

The question at hand involves calculating the dollar amount that each beneficiary will receive from a life insurance policy. Todd has a policy worth $150,000 and he wants to distribute parts of it to his daughter, stepson, and grandson. Let us break down the amounts based on the fractions given.

Todd's daughter is to receive 1/3 of the policy's value. Therefore:

1/3 of $150,000 = $150,000 / 3 = $50,000

Todd's stepson is to receive 1/4 of the policy's value. Hence:

1/4 of $150,000 = $150,000 / 4 = $37,500

The total amount allotted to the daughter and stepson is:

$50,000 (daughter) + $37,500 (stepson) = $87,500

To find out what Todd's grandson will receive, we subtract the total amount allotted to the daughter and stepson from the total policy value:

$150,000 (total policy value) - $87,500 (daughter and stepson) = $62,500

Therefore, Todd's grandson will receive $62,500.