Level 2
Chapter 19 – Section I – Exercise 3
Calculate the annual, semiannual, quarterly, and monthly premium for a $25,000
20-year endowment life insurance policy for a 19-year-old male. Use Tables 19-1
and 19-2.
Face Value
of Policy
Sex and Age
of Insured
Type of Policy
Annual
Premium
Semiannual
Premium
Quarterly
Premium
Monthly
Premium
Level 2
Chapter 19 – Section I – Exercise 5
Calculate the annual, semiannual, quarterly, and monthly premium for the following
life insurance policy. Use Tables 19-1 and 19-2.
Level 1
Chapter 19 – Section I – Exercise 15
Leroy Kirk is 35 years old and is interested in purchasing a 20-year endowment
insurance policy with a face value of $120,000.
a. Calculate the annual premium for this policy.
Note: Refer to the tables in the text for input data.
b. Calculate the semiannual premium.
Level 2
Chapter 19 – Section I – Exercise 16
Rene Boyer, age 27, wants to purchase a 5-year term insurance policy with a
face value of $25,000. As her insurance agent, answer the following:
a. What is the annual premium for this policy?
Note: Refer to the tables in the text for input data.
b. What is the monthly premium?
Note: Use Excel’s Round function to round to the nearest cent.
c. How much more will Rene pay per year if she chooses monthly payments?
Level 3
Chapter 19 – Section I – Exercise 19
Richard Ryan is evaluating his life insurance needs. His family‘s total living
expenses are $37,500 per year. Olga, his wife, earns $14,900 per year in salary and
receives another $3,500 annually in disability benefits from an insurance settlement
for an accident. If the prevailing interest rate is 7 1/2%, how much life insurance should
Richard purchase to cover his dependents’ income shortfall? Round to nearest $1,000.
Hint: For your final answers use Excel’s Round function. Can you determine how to round
to the nearest 1000 (as opposed to 1/1000)?
Level 2
Chapter 19 – Section II – Exercise 1
Calculate the building, contents, and total property insurance premiums for an $88,000
building of structural class B and area rating 4. The contents are valued at $21,000.
Level 2
Chapter 19 – Section II – Exercise 16, 17
Calculate the amount to be paid by the insurance company for each of the following
claims:
Note: Refer to the text for input data.
Exercise #16 Exercise #17
Level 2
Chapter 19 – Section II – Exercise 18, 19
Calculate the amount to be paid by the insurance company for each of the following
claims:
Note: Refer to the text for input data.
Exercise #18 Exercise #19
Replacement value of building = $125,000.00 $500,000.00
Level 1
Chapter 19 – Section II – Exercise 22
Insignia Enterprises has a property insurance policy with an annual premium of
$1,320. In recent months, Insignia has filed four different claims against the policy:
a fire, two burglaries, and a vandalism incident. The insurance company has elect-
ed to cancel the policy, which has been in effect for 310 days. What is the regular
refund due to Insignia?
Level 2
Chapter 19 – Section II – Exercise 23
Hi-Volt Electronics had multiple carrier fire insurance coverage in the amount of
$500,000, as follows:
Note: Refer to text for input data.
Assuming that all coinsurance clause stipulations have been met, how much would
each carrier be responsible for in the event of a $95,000 fire?
Amount of loss = $95,000.00
Level 3
Chapter 19 – Section III – Exercise 9
Rick Clinton would like to purchase an automobile insurance policy with bodily injury
and property damage coverage in the amounts of 50/100/50. In addition, he wants
collision coverage with $250 deductible and comprehensive with no deductible. Rick
is in driver classification 4 and lives in territory 3. His vehicle, a Mercedes 190S, is in
model class B and is 1 year old. Rick has had two accidents and one ticket in the
past 12 months and is therefore considered to be a high risk. Consequently, the
insurance company has assigned a rating factor of 4.0 to his policy. As Rick’s automobile
insurance agent, calculate the total annual premium for his policy.
Note: Refer to the tables 19-6 and 119-7 for input data.
Level 3
Chapter 19 – Section III – Exercise 10
Howard Marshall’s Corvette was hit by a palm tree during a hurricane. The damage was
estimated at $1,544. If Howard carried $250 deductible collision and $100 deductible
comprehensive, how much of the damages does the insurance company have to pay?
Level 2
Chapter 19 – Assessment Test – Exercise 4
Calculate the annual, semiannual, quarterly and monthly premiums for a $175,000
whole life policy for a 30-year-old male. Use Tables 19-1 and 19-2.
Amount of
Premium
Annual
Semiannual
Quarterly
Monthly
Level 2
Chapter 19 – Assessment Test – Exercise 7
Tommy Cook is 19 years old and is interested in purchasing a whole life insurance
policy with a face value of $80,000.
a. Calculate the annual insurance premium for this policy.
Note: Refer to the tables in the text for input data.
b. Calculate the monthly insurance premiums.
c. How much more will Tommy pay per year if he chooses monthly payments?
Level 2
Chapter 19 – Assessment Test – Exercise 17
You are the insurance agent for Fandango Fashions, a company that imports men’s
and women’s clothing from Europe and the Far East. The owner, Ron Harris, would
like you to give him a quote on the total annual premium for property insurance on a new
warehouse and showroom facility in the amount of $320,000. The building is structural
classification B and area rating 4. In addition, Ron will require contents insurance in the
amount of $1,200,000.
Note: Refer to the tables in the text for input data.
Property insurance table factor = $0.76
Level 2
Chapter 19 – Assessment Test – Exercise 19
La Belle Beauty Supply had property valued at $750,000 and insured for
$600,000. The fire insurance policy contained an 80% coinsurance clause. One
evening, an electrical short-circuit caused a $153,000 fire. How much of the da-
mages will be paid by the insurance company?
Value of the property = $750,000.00
Level 3
Chapter 19 – Assessment Test – Exercise 20
Bubbly Cola Bottling Company had multiple carrier fire insurance coverage on its plant
and equipment in the amount of $2,960,000, as follows:
Assuming that all coinsurance clause stipulations have been met, how much would each
carrier be responsible for in the event of a $430,000 fire? (Round to the nearest whole percent)
Note: Use Excel’s Round function to round your decimal result to the nearest 1/100th.
Your percent will then be rounded to the nearest whole number.
Amount of loss = $430,000.00
Level 1
Chapter 19 – Assessment Test – Exercise 24
Karen Doyle would like to purchase an automobile insurance policy with bodily
injury and property damage coverage in the amounts of 25/50/25. In addition, she
wants collision coverage with $250 deductible and comprehensive with $100 deductible.
Karen is in driver classification 2 and lives in territory 3. Her vehicle, a new Ford
Mustang, is in model class B. Because the car has an airbag, an alarm, and antilock
brakes, the insurance company has assigned a rating factor of .95 to the policy. As
her auto insurance agent, calculate Karen’s total annual premium.
Note: Refer to the tables in the text for input data.
Bodily injury table factor = $86.00