Final answer:
The cash value of John Livingston's 30-pay life policy, which he purchased at age 30, is designed to equal the face amount of the policy usually when he reaches the age of 100. The correct option is B.
Step-by-step explanation:
The student asked when the cash value of John Livingston’s 30-pay life policy, purchased at the age of 30, would equal the face amount of the policy. A 30-pay life policy is a type of whole life insurance that is paid up over 30 years, meaning after 30 payments, the policyholder no longer needs to make payments and the policy is considered fully funded.
In such policies, the cash value grows each year and is designed to equal the face amount of the policy when the policyholder reaches a certain age. In many cases, this age is 100. It’s important to note that while John started the policy at age 30 and will have finished paying for it by age 60, the cash value equaling the face amount typically isn't designed to occur until the policy anniversary when the insured is 100. Therefore, the correct answer to this question would be D. 100.
Understanding life insurance policies like the one John Livingston has is vital for financial planning. It requires knowledge of how policies work, including their payment structures, cash value growth, and maturity dates. Life insurance is not only a way to protect your family in the event of death but can also be a tool for retirement planning, as some policies accumulate cash value over time that can be used in the future.