Differentiate between initial and termination expenses, Finance Basics

Assignment Help:

(a) State the most appropriate drivers for the following direct expenses:

(i) New business administration department's salary costs
(ii) Medical examinations for temporary life policies
(iii) Commission payment to direct salesman

(b) Differentiate between initial, renewal and termination expenses.

(c) Mr Howcome, aged 45, buys a whole life assurance policy with a death bene?t of $ 30,000, payable at the end of the year of death. Using AM92 Ultimate Mortality with 4% pa interest, calculate the gross premium payable by Mr Howcome annually in advances for 15 years, allowing for the following expenses:

Initial expenses of $ 278 plus 65% of the annual premium, renewal expenses of $ 70 (incurred throughout life from year 2 onwards) plus 5% of the annual premium (incurred at the time of payment of each premium from year 2 onwards) and claim expenses of 3.5% of sum insured.

(d) Kevin, aged 35, takes out a whole life insurance policy with a death bene?t of $ 50,000, payable at the end of the year of death. If Kevin dies within the next 20 years the policy will pay out $ 10,000 pa from the policy anniversary following his death with the last payment being made on the 20th policy anniversary. Considering the following expenses; (Initial) $ 750 at outset, (Renewal) 4% of each premium on collection and (Termination) $ 500 at the time of his death should this occur in the ?rst 20 years plus 0.5% of the sum insured on payment, calculate the half yearly premium payable throughout Kevin's future lifetime under the AM92 Select Mortality with 4% pa interest.


Related Discussions:- Differentiate between initial and termination expenses

Finance, Pls help with this + provide references > Briefly outline the mos...

Pls help with this + provide references > Briefly outline the most recent balance of payments experience for China and comment on whether the balance of payments situation will ha

Determine the component of return, Determine the Component of Return ...

Determine the Component of Return Rate of return from an investment consists of the two: (i) Yield: Interest or dividend received is called yield. (ii) Capital Appreci

Reasons for why ordinary share capital is attractive, Reasons for why Ordin...

Reasons for why Ordinary Share Capital is Attractive Reasons for why ordinary share capital is attractive despite to be risky Shares are used as securities for loans as

Government - measuring business performance, Government - Measuring Busines...

Government - Measuring Business Performance Government The Government is interested particularly in utility companies as KPLC, KPTC and such will offers public services -

Estimate the coupon rate and promised rate on bond, Petroleo Brasileiro (PB...

Petroleo Brasileiro (PBR) has just issued 1M one year bonds. Each bond hasa face value of1,000 Reais. Owners of the bonds are entitled to receive $R 1000 back at the end of the yea

Calculate internal rate of return, 1. Each project has RM 10,000, and the c...

1. Each project has RM 10,000, and the cost of capital for each project is 12%. The projects' expected cash flows are as follows: Expected Net Cash Flows YEAR

Cash deficit and cash surplus, What is cash deficit?And what is cash surplu...

What is cash deficit?And what is cash surplus?Describe each of them in detail.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd