Donna purchased a 20-payment life insurance policy having a face value of $350,000 when she was 23 years old. What is the cash value of her policy if she is now 26 years old?

Question

Quizplus · Accepted Answer

The cash value of a life insurance policy increases over time as the policyholder pays premiums. The cash value is typically a small percentage of the face value of the policy. In this case, Donna has paid premiums for 3 years, so the cash value of her policy is likely to be a small percentage of $350,000. Choice A, $10,150, is the only choice that is a small percentage of $350,000.

Donna Purchased a 20-Payment Life Insurance Policy Having a Face