Question

Jonathan has a universal life insurance policy with a face value of $500,000. The current cash value of the policy is $11,260. Jonathan wants
to stop paying premiums for a few months while he changes jobs. The premium is $134 per month.

Answer 1

The cash value of the policy be, without adding any interest, if he doesn’t pay the premiums for a year is $9,652

What is insurance policy?

An insurance policy is a contract between one and insurance company which spelt out details of the agreement.

Jonathan has a policy with a face value of $500,000

The current cash value of the policy is $11, 260

The premium is $134 per month. He wants to stop paying premium for few months while he changes job.

Thus, the annual premium is,

= $134 * 12

= $1,608

Now if Jonathan does not pay the premiums for a year, then the cash value of the policy without adding interest is

= $11,260 - $1,608

= $9,652

Hence, the cash value of the policy be, without adding any interest, if he doesn’t pay the premiums for a year is $9,652

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