TABLE 20.2 Nonforfeiture options based on $1,000 face value STRAIGHT LIFE 20-PAYMENT LIFE Years Amount of EXTENDED Amount of EXTENDED Amount of 20-YEAR ENDOWMENT EXTENDED insurance Cash paid-up TERM Cash paid-up TERM Cash paid-up TERM policy in force value insurance Years Days value insurance Years Days value insurance Years Days 5 29 86 9 91 71 220 19 190 92 229 23 140 10 96 259 18 76 186 521 28 195 319 520 30 160 15 148 371 20 165 317 781 32 176 610 790 35 300 20 265 550 21 300 475 1,000 Life 1,000 1,000 Life Option 1: Cash value $200,000+ $1,000 = 200 x $148 = $29,600 Option 2: Reduced paid-up insurance $200,000 ÷ $1,000 = 200 x $371 = $74,200 Option 3: Extended term insurance Bob could continue this $200,000 policy for 20 years and 165 days.

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter4: Time Value Of Money
Section: Chapter Questions
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TABLE 20.2
Nonforfeiture options based on $1,000 face value
STRAIGHT LIFE
20-PAYMENT LIFE
Years
Amount of
EXTENDED
Amount of
EXTENDED
Amount of
20-YEAR ENDOWMENT
EXTENDED
insurance
Cash
paid-up
TERM
Cash
paid-up
TERM
Cash
paid-up
TERM
policy in force
value
insurance
Years
Days
value
insurance
Years Days
value
insurance
Years
Days
5
29
86
9
91
71
220
19
190
92
229
23
140
10
96
259
18
76
186
521
28
195
319
520
30
160
15
148
371
20
165
317
781
32
176
610
790
35
300
20
265
550
21
300
475
1,000
Life
1,000
1,000
Life
Option 1: Cash value
$200,000+ $1,000 = 200 x $148 = $29,600
Option 2: Reduced paid-up insurance
$200,000 ÷ $1,000 = 200 x $371 = $74,200
Option 3: Extended term insurance
Bob could continue this $200,000 policy for 20 years and 165 days.
Transcribed Image Text:TABLE 20.2 Nonforfeiture options based on $1,000 face value STRAIGHT LIFE 20-PAYMENT LIFE Years Amount of EXTENDED Amount of EXTENDED Amount of 20-YEAR ENDOWMENT EXTENDED insurance Cash paid-up TERM Cash paid-up TERM Cash paid-up TERM policy in force value insurance Years Days value insurance Years Days value insurance Years Days 5 29 86 9 91 71 220 19 190 92 229 23 140 10 96 259 18 76 186 521 28 195 319 520 30 160 15 148 371 20 165 317 781 32 176 610 790 35 300 20 265 550 21 300 475 1,000 Life 1,000 1,000 Life Option 1: Cash value $200,000+ $1,000 = 200 x $148 = $29,600 Option 2: Reduced paid-up insurance $200,000 ÷ $1,000 = 200 x $371 = $74,200 Option 3: Extended term insurance Bob could continue this $200,000 policy for 20 years and 165 days.
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