Risk Management

      A participating ordinary life policy in the amount of S10,000 is sold to an individual, age 35. The following cost data are given: Annual premium $230 Total dividends for 20 years $1613 Cash value at end of 20 years 53620 Accumulated value of the annual pre- $7985 miums at 5 percent for 20 years Accumulated value of the dividends at S2352 5 percent for 20 years Amount to which S1 deposited annually at the beginning of each year will Accumulate in 20 years at 5 percent 534.719 a. Based on this information, compute the annual net cost per 51000 of life insurance at the end of 20 years using the traditional net cost method. b. Compute the annual surrender cost index per $1000 of life insurance at the end of 20 years. c. Compute the annual net payment cost index per $1000 of life insurance at the end of 20 years.     1. much life insurance do you need? (Base your calculations on the assumption that you have graduated from college and have a ‘real’ job.) Specify the details of your situation (married, kids, etc). a.Calculate the amount of life insurance you should have using the human life value approach. b.Calculate the amount of life insurance you should have using the needs approach. c.What do YOU think is the correct amount of life insurance? 2.Find a life insurance policy that fits your How much coverage? What is the premium? a.What type of insurance is best for you? b.Use GOOGLE to find policies and receive quotes.