A 65 year old-fashioned man intends to use his retirement funds to purchase an annuity from a energy insurance company.?
given the amount of money the man has available to invest, the insurance company is able to contribute two alternatives. the first option is to receive $2785 each month for as long as he lives; the second substitute is to receieve $3500 each month, but for only 20 years (payments will be made to his estate if he should die beforehand that time) the relevant interest rate is 6 percent per year. how long must the man live so that the first option is a better deal?
can someone please report to me how to answer this question?
Answers:
Everything I have hear is annuity, never.
How is his health ?
Does he smoke like a smoldering haystack ?, and
Does he drink resembling a fish ?
If yes, then he should most definitely transport the 3500 option, and forget about a long energy, because he's burning both ends to the middle. Let the life insurance pay rotten.
(Make sure that he has a will and a beneficiary, so the government doesn't grasp it.)
Your request for information is how many months longer must he receive $2785 before he receive the same total that he would collect taking $3500 over 20 years. Use your algebra.
2785 X x= 3500 X 240
2785 X x= 840,000
x = 840,000 /2785
x = 301 months
301/12 = 25.1 years
Will payments be made to his estate in any scenario? Probably not, but it's your money and your 1st consideration should be you (if you are the man). It's a gamble, but if you are healthy and longevity runs within your family, then stir for door #1. If not, then walk through #2.
The break even point is at the age of 91.
If your 65 year old man lives to 91, next all payments after that birthday will be above what the other option pays.
So, surrounded by deciding which option is best, you will requirement to take into consideration his health, relations history, any existing health condition, and lifestyle ( smoking, drinking, etc ).
If he has more than a 50% arbitrariness of making it to 91, then one might choose the first payment calendar with more confidence. But unexpected events could adversely affect it - a sudden weakness, an accident, criminal activity, etc.
Ultimately, you will own to take on a certain scope of risk, but at least you will have information to guide your decree. Try this site to find the best life insurance
http://best-life-insurance-usa.blogspot.com/
Here you can get quotes from different vivacity insurance companies in your area, its the best mode to find an affordable life insurance with a reliable company.
Hope this give support to,
What about those vanished behind? How much do they need and for how long. The wife may out live him by years and obligation the income. That matters more than how long he might live.
Annuities usually make the insurance agent very blissful and rich. You would be taking a chance on getting everything back but believe me, the insurance guy will not lose a item.
Just ask him to put a signed statement up showing what he will get from that annuity for himself and or company.
Related Questions:
can someone please report to me how to answer this question?
Answers:
Everything I have hear is annuity, never.
How is his health ?
Does he smoke like a smoldering haystack ?, and
Does he drink resembling a fish ?
If yes, then he should most definitely transport the 3500 option, and forget about a long energy, because he's burning both ends to the middle. Let the life insurance pay rotten.
(Make sure that he has a will and a beneficiary, so the government doesn't grasp it.)
Your request for information is how many months longer must he receive $2785 before he receive the same total that he would collect taking $3500 over 20 years. Use your algebra.
2785 X x= 3500 X 240
2785 X x= 840,000
x = 840,000 /2785
x = 301 months
301/12 = 25.1 years
Will payments be made to his estate in any scenario? Probably not, but it's your money and your 1st consideration should be you (if you are the man). It's a gamble, but if you are healthy and longevity runs within your family, then stir for door #1. If not, then walk through #2.
The break even point is at the age of 91.
If your 65 year old man lives to 91, next all payments after that birthday will be above what the other option pays.
So, surrounded by deciding which option is best, you will requirement to take into consideration his health, relations history, any existing health condition, and lifestyle ( smoking, drinking, etc ).
If he has more than a 50% arbitrariness of making it to 91, then one might choose the first payment calendar with more confidence. But unexpected events could adversely affect it - a sudden weakness, an accident, criminal activity, etc.
Ultimately, you will own to take on a certain scope of risk, but at least you will have information to guide your decree. Try this site to find the best life insurance
http://best-life-insurance-usa.blogspot.com/
Here you can get quotes from different vivacity insurance companies in your area, its the best mode to find an affordable life insurance with a reliable company.
Hope this give support to,
What about those vanished behind? How much do they need and for how long. The wife may out live him by years and obligation the income. That matters more than how long he might live.
Annuities usually make the insurance agent very blissful and rich. You would be taking a chance on getting everything back but believe me, the insurance guy will not lose a item.
Just ask him to put a signed statement up showing what he will get from that annuity for himself and or company.
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