Question

Grace's employer is now offering group-term life insurance. The company will provide each employee with $200,000 of group-term life insurance. It costs Grace's employer $700 to provide this amount of insurance to Grace each year. Assuming that Grace is 43 years old, use the table to determine the monthly premium that Grace must include in income as a result of receiving the group-term life benefit?

A. $0.
B. $15.00.
C. $22.00.
D. $58.33.

Answer 1

To determine the monthly premium that Grace must include in income as a result of receiving the group-term life benefit, we need to refer to the IRS Table I rates for group-term life insurance. According to the table, the monthly premium Grace must include in income is $58.33.

Step-by-step explanation:

To determine the monthly premium that Grace must include in income as a result of receiving the group-term life benefit, we need to refer to the IRS Table I rates for group-term life insurance.

Since Grace is 43 years old, we can find the applicable rate from the table. According to the table, the monthly rate for a $200,000 benefit at age 43 is $1.15 per $1,000.

So, the monthly premium Grace must include in income is $200,000 x $1.15 / $1,000 = $230.

Therefore, the correct answer is D. $58.33.