Question

Alexandra Cunningham of Gardner, Massachussets, has a $100,000 participating cash-value policy written on her life. The policy has accumulated $4,700 in cash value; Alexandra has borrowed $3,000 of this value. The policy also has accumulated unpaid dividends of $1,666. Yesterday Alexandra paid her premium of $1,200 for the coming year. What is the current death benefit from this policy?

Answer 1

Current death benefit from this policy = $98766

Explanation;

Following information are given;

Participating cash value = $100000

Acumulated cash value = $4700

Borrowed amount = $3000

Accumulated unpaid dividends = $1666

Coming year dividend paid = $1200

Current death benefit from this policy will be calculated with the help of following formula;

(Participating cash value + Unpaid dividend + Borrowed amount – Coming year dividend paid – Accumulated cash value)

Now let’s put the values in above given formula;

($100000 + $1666 + $3000 – $1200 – $4700) = $98766