Calculate the reduced paid-up insurance for Lee Chin, age 42, who purchased a $100,000 straight life policy. At the end of year 20, Lee stopped paying premiums. (Use Table 20.2). (Omit the "$" sign in your response.)
What is the reduced paid-up insurance?
What am I supposed to do? I don't understand this question.
Now how do you expect us to know what table 20.2 is ??
To calculate the reduced paid-up insurance for Lee Chin, we need to use Table 20.2. Based on the provided information, Lee Chin is 42 years old and purchased a $100,000 straight life policy.
To find the reduced paid-up insurance, we will follow these steps:
Step 1: Determine the number of years that have passed since the policy was purchased. In this case, it is the end of year 20.
Step 2: Locate the row that corresponds to Lee Chin's age (42) in Table 20.2. Scan across the row to find the column that represents the number of years passed (20).
Step 3: Once you find the intersection of Lee Chin's age row (42) and the years passed column (20), you will find a value in that cell. This value represents the factor that needs to be multiplied by the original insurance amount ($100,000).
Step 4: Multiply the insurance amount by the factor found in Step 3. This will give you the reduced paid-up insurance amount.
Now, with the specific information provided and using Table 20.2, you can locate the appropriate cell, read the factor for 20 years, and multiply it by $100,000 to calculate the reduced paid-up insurance amount for Lee Chin.