Which of the following statements about the yearly-rate-of-return method (also known as the Belth method)of calculating the yearly rate of return for a life insurance policy is (are)true?
I.The formula requires the use of benchmark prices per $1,000 of protection.
II.The main drawback of the formula is its complexity,necessitating the use of a computer to calculate the rate of return.

Question

Quizplus · Accepted Answer

The statement about the use of benchmark prices per $1,000 of protection is true. However, the statement about the formula being complex and requiring the use of a computer to calculate the rate of return is not accurate. The Belth method is actually a relatively simple formula that can be calculated manually or with the use of a calculator.

Which of the Following Statements About the Yearly-Rate-Of-Return Method (Also