

Compute the one-year term premium for a $1000 face value policy given age=43 and the discount rate=4%.

Enter your answer without a "$".


To compute the one-year term premium for a policy, we would typically use mortality tables or other actuarial assumptions to estimate the probability of death within the year. However, given the information that age = 43 and discount rate = 4%, it seems like some of this data is missing. 

For simplicity, let's assume we're using a basic calculation where the premium is the face value discounted at the given rate for one year. This would give us an idea of the premium based on the time value of money.

The formula for discounting is:

\[
\text{Premium} = \frac{\text{Face Value}}{(1 + \text{discount rate})}
\]

Given:
- Face value = 1000
- Discount rate = 4% = 0.04

Substitute these into the formula:

\[
\text{Premium} = \frac{1000}{1 + 0.04} = \frac{1000}{1.04}
\]

Now, let's compute the value.The one-year term premium for a $1,000 face value policy, given a discount rate of 4%, is approximately 961.54.

Would you like more details or have any questions? 

Here are five related questions:
1. How does the discount rate affect the premium in long-term policies?
2. What role do mortality tables play in determining term life insurance premiums?
3. How would the premium change with a higher face value?
4. What are the different methods used to calculate premiums in insurance?
5. How would the term premium differ for different ages?

**Tip:** In insurance, the discount rate is crucial for calculating present value, which impacts the premiums charged for policies.

Compute the one-year term premium for a $1000 face value policy given age=43 and the discount rate=4%. Enter your answer without a '$'.

Learn how to compute the one-year term premium for a $1000 face value life insurance policy for a 43-year-old with a 4% discount rate. This example explains the time value of money and provides a step-by-step solution. Suitable for college-level finance or actuarial studies.

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