Help I need a step by step answer on how to do this finance question ?

Scott has a universal life insurance policy with a face value of $250,000. The current cash value of the policy is $2,860. If the premium is $79 per month, for how many months can the cash value be used to pay the premium? 

2 Answers

Relevance
  • car253
    Lv 7
    1 month ago

    How long will the policy last without any more payments ?   That depends on the mortality cost which means the cost of insurance.    Paying $79 a month is NOT the cost of the insurance.   That is how much money you are putting into an account every month.  That is NOT the cost of insurance.  If you do not know the cost of insurance you have to call your insurance agent or company and ask them how much are they charging you for the life insurance.    And, ask them to give you an "illustration" that shows if you don't make any more payments how long the policy will last you.    

    Source(s): Insurance agent
    • Commenter avatarLog in to reply to the answers
  • Anonymous
    1 month ago

    What did you teacher tell you?

    • Commenter avatarLog in to reply to the answers
Still have questions? Get answers by asking now.