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Question
Solve the following :
A person holding a life policy of ₹1,20,000 for a term of 25 years wants to discontinue after paying premium for 8 years at the rate of ₹58 per thousand p. a. Find the amount of paid up value he will receive on the policy. Find the amount he will receive if the surrender value granted is 35% of the premiums paid, excluding the first year’s premium.
Solution
Given, Policy value = ₹1,20,000
Period of policy = 25 years
∴ Paid up value of one year = `"Policy value"/"Period of policy"`
= `(1,20,000)/(25)`
= ₹4,800
But, the person wishes to discontinue after paying premium for 8 years
∴ Paid up value = 4,800 x 8 = ₹38,400
Amount of premium paid for one year
= `(58)/(1000) xx 1,20,000` = ₹6,960
∴ Amount of premium paid for 8 years
= 6,960 x 8
= ₹55,680
Surrender value
= 35% of (premium paid for 8 years – premium paid for first year)
= `(35)/(100) xx (55,680 - 6,960)`
= `(35)/(100) xx 48,720`
= ₹17,052
∴ The person holding life policy will get amount of ₹17,052.
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Property value = ₹ 12,50,000
Rate of premium, r = ₹ 3%
If property is fully insured, the policy value is same as property value therefore policy value = `square`
Premium = `"r"/100 xx "policy value"`
= `square/100 xx 12,50,000`
= `square`
Policy value = ₹ 80,000
Period of policy = 20 years
Amount of money paid in 10 years = `square`
Annualized average rate per bonus = ₹ 20 per thousand per year
For one year, bonus = `square/1000 xx 80,000`
= ₹ 1,600
Bonus for 10 years = `10 xx square`
= ₹ 16,000
Total amount after 10 years = `square + 16000`
= ₹ `square`
Property value = ₹ 12,50,000
Rate of premium, r = ₹ 3%
If property is 80% insured
Policy value = 80% of its property value
= `square/100 xx 12,50,000`
= ₹ 10,00,000
Premium = `square/100 xx 10,00,000`
= ₹ `square`
