Case – Godiva Case

Any of irrelevant information to the question below, you can ignore from the description. This case will be updated and continued to the Second Case Study at the final.

Robinson Godiva is 46 years old, and his wife Geniece is 37 years old. Robinson and Geniece were married 8 years ago; it was Robinson’s second marriage and Geniece’s first marriage. Robinson and Geniece have one child Chaplin, who is 6 years of age. Robinson has two children by his prior marriage: Lorna, who is 14 years of age, and Eva, who is 12. All of children attend public schools.

Robinson is a chemistry professor at the university and is a partner in Lion Research Associates, a chemistry firm that Robinson started with three of his associates from the university.

The university provides disability income coverage for one-third of Ronbinson’s salary, group medical expense insurance covering Robinson and his family through a health maintenance organization, and group term life insurance for Robinson, with a death benefit of $50,000. Robinson owns a whole life insurance policy that will pay a death benefit of $100,000 and has a cash value of $5,500, and he owns a universal life policy with a face value of $150,000 and a cash value of $3,000. The annual premium on the whole life policy is $2,000, and the annual premium on the universal life policy is $800. Geniece has group term life insurance through her employer in a face amount that is equal to her salary.

Question. Which of the following statements concerning the various life insurance policies owned by Robinson and Geniece is correct?

A. As the cash value of Robinson’s whole life policy increases the face amount of the policy payable declines.

B. The annual premium per $1,000 of coverage is $4.00 for the whole life policy and $5.33 for the universal life policy.

C. The investment yield is known for the policy’s duration for both the whole life policy and the universal life policy.

D. Robinson might successfully elect to pay no premiums for three years on his universal life policy.

E. Geniece has the option of converting her group term life insurance to a cash value permanent type of coverage on any date she chooses.