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Morgan is a 32-year-old nurse. She is in good health and has applied for a new cash value life insurance policy. She is interested in knowing whether she should surrender her current policy and purchase the new policy offered through a AAA-rated firm. If all of the contract and company characteristics are similar, and the current face value of her policy is sufficient, should she maintain or replace her current policy? Assume the following factors:

- Yearly premium: $1,900

- Cash value at the beginning of the period: $13,456

- Cash value at the end of the period: $13,927

- Projected after-tax rate of return: 3.50%

- Current policy dividend: $350

- Death benefit: $200,000

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M938142

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