Ray's New Higher Arithmetic · Arts. 354–355 · Unit 22: Percentage with Time: Compound Interest and Annuities
101. Life insurance optional
Goal: Your student explains ordinary life and endowment policies and uses a premium table to work simple life-insurance problems.
You'll need
- The book
- A slate, small whiteboard or scrap paper
- A notebook and pencil
What's in the book
Personal insurance: life and accident insurance, the kinds of policies, a table of annual premiums per $1000, the quantities considered, examples (answers printed), and the topical outline of the chapter.
The lesson, step by step
Warm-up
Ask: What is the difference between insuring a house and insuring a person's life?
The idea
Read:
Life Insurance is a contract in which a company agrees, in consideration of certain premiums received, to pay a certain sum to the heirs or assigns of the insured at his death, or to himself if he attains a certain age.
The Ordinary Life Policy secures a certain sum of money at the death of the insured.
An Endowment Policy secures to the person insured a certain sum of money at a specified time
Read the table
Look at the premium table. Find the yearly premium for a $1000 life policy at age 40. Read:
Simple interest is intended where interest is mentioned in the following problems.
Guided practice
W. R. Hamilton, aged 40 years, took a life policy for $5000. Required the annual premium?
Then: if he died after 14 payments, how much had he paid? (14 × the premium.)
Independent practice
Your student works two or three more, for example:
Allen Wentworth had his life insured at the age of twenty, on the life plan, for $8000, premium payable annually: how old must he be, that the sum of the premiums may exceed the policy?
Chapter review
Turn to the topical outline of Applications of Percentage (With Time). Have your student name the base in interest, bank discount and exchange.