J.C. Monahan's annual premium for a straight life insurance policy of $210,000 is $3,096.
To calculate J.C. Monahan's annual premium, we need to know her age and the type of life insurance policy she purchased.
In this case, she is 40 years old and purchased a straight life insurance policy for $210,000.
To calculate the premium, we can use the following formula:
Annual premium = Face value of policy * Annual premium rate
The annual premium rate is based on the policyholder's age and the type of life insurance policy.
We can find the annual premium rate for a straight life insurance policy in Table 20.1.
According to Table 20.1, the annual premium rate for a 40-year-old female is $14.80 per $1,000 of face value. This means that J.C. Monahan's annual premium will be:
Annual premium = $210,000 * $14.80 per $1,000 = $3,096
Therefore, J.C. Monahan's annual premium for a straight life insurance policy of $210,000 is $3,096.
Non-forfeiture options available after 20 years
If J.C. Monahan stops paying her premiums after 20 years, she will have the following non-forfeiture options:
Cash surrender value: The cash surrender value is the amount of money that the insurance company will pay back to the policyholder if they cancel their policy.
The cash surrender value increases over time as the policyholder pays premiums.
Reduced paid-up insurance: Reduced paid-up insurance is a new policy with a smaller face value that the policyholder can keep without paying any further premiums.
The face value of the reduced paid-up policy is based on the cash surrender value of the original policy.
Extended term insurance: Extended term insurance is a temporary life insurance policy that the policyholder can keep for a specific period of time without paying any further premiums.
The length of the extended term policy is based on the cash surrender value of the original policy.
The following table shows the non-forfeiture options available to J.C. Monahan after 20 years, assuming that she has paid her premiums on time:
| Non-forfeiture option | Amount |
|---|---|---|
| Cash surrender value | $29,600 |
| Reduced paid-up insurance | $74,200 |
| Extended term insurance | 20 years and 165 days |
Which non-forfeiture option is best for J.C. Monahan will depend on her individual circumstances.
If she needs the cash immediately, she may choose to take the cash surrender value.
If she wants to keep life insurance coverage, she may choose to take the reduced paid-up policy or the extended term policy.