What amount will be returned to him when his contract mature

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Reference no: EM133924838

Problem

Gabriel, 35, meets with a financial security advisor because he's not covered by a group insurance plan. He reviews the insurance application provided to him by the advisor: Disability benefits: $2,500/month, monthly premium: $125, expiration of coverage: age 65. He finds the premiums high and feels he is wasting his money, especially if he never files a claim. His advisor suggests adding the return of premium (ROP) rider (70% at age 65), which will raise the monthly premium to $150. He explains the proposed ROP rider will refund 70% of the premiums Gabriel pays over the life of the policy, less any disability benefit received. After thinking about it, Gabriel asks for the ROP benefit to be included and signs the application. Get the instant assignment help. If Gabriel claims eight months of disability benefits, what amount will be returned to him when his contract matures?

Reference no: EM133924838

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