LIFE INSURANCE DECISIONS 4.02 Activity 7?
Millie and Tom Collins just celebrated their 10th anniversary. The couple bought two $50,000 term life insurance policies with American Insurance just after their marriage. Each month they pay $22 for Tom’s and $18 for Millie’s insurance. If either one died, the other is named to get the insurance money. The couple just adopted a baby girl, Barbara, and added coverage for the baby to their policy. The monthly cost for Barbara is $8.
1. American Insurance is what party to the contract?
2. Millie and Tom are what parties to the contract?
3. Why can Millie and Tom have insurance policies on each other?
4. What is the premium?
5. What is the face amount?
- DON WLv 75 months ago
I'll try to help:
Because they have insurable interests in each other
$22/mo for Tom and $26/mo for Millie
$50,000 each for two policies