LIFE INSURANCE LESSON 7.1

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2 LIFE INSURANCE LESSON 7.1 Life Insurance Premiums Face Value of Policy $1,000 = Number of 1,000 Units Number of $1,000 Units x Cost per Unit = Annual Premium Net Cost of Insurance Total Premiums Dividends = Net Cost of Insurance 2

3 Life Insurance Cash Values Face Value of Policy $1,000 = Number of $1,000 Units Number of $1,000 Units x Cash/Loan Values per $1,000 from Table = Maximum Loan Amount of Policy 3

4 HEALTH INSURANCE LESSON 7.2 Health Insurance Premiums Total Monthly Premium x 12 = Total Annual Premium Total Annual Premium x Employer s Percentage Share = Part of Annual Premium Paid by Employer Total Annual Premium Employer s Percentage Share = Employee s Share of Health Insurance for Year 4

5 Health Insurance Benefits and Coinsurance Total Bill Covered Amount = Uncovered Amount (Covered Amount Deductible) x Coinsurance Rate = Coinsurance Amount Uncovered Amount + Deductible + Coinsurance = Amount Patient Must Pay 5

6 Disability Insurance Benefit DISABILITY INSURANCE LESSON 7.3 Total of Annual Wages Number of Years = Average Wages Average Wages x Benefit Percentage = Annual Disability Benefit Annual Disability Benefit 12 = Monthly Disability Benefit 6

7 BUYING BONDS LESSON 7.4 Market Price of Bonds Par Value x Selling Price (%) = Market Value Total Investment in Bonds Par Value x Selling Price (%) = Market Price of One Bond Market Price of One Bond + Commission = Total Bond Price Plus Commission Total Price of One Bond x Number of Bonds Purchased = Total Investment 7

8 BOND INTEREST LESSON 7.5 Bond Income Par Value x Rate x Time = Interest Bond Yields Face Value x Interest Rate = Annual Income Face Value x Selling Price (%) = Bond Price Annual Income Bond Price = Current Yield (%) 8

9 Total Cost of Bonds Market Price (%) x Par Value = Price of One Bond Price of One Bond + Accrued Interest + Commission = Cost of Each Bond Cost of Each Bond x Number of Bonds Purchased = Total Cost of Bond Purchase 9

10 STOCKS LESSON 7.6 Purchasing Stock Number of Shares x Price Per Share = Total Price of Shares Total Price of Shares + Broker s Commission = Total Cost of Shares Stock Dividends Par Value x Dividend Percent = Dividend on One Share Dividend on One Share x Number of Shares = Total Dividend 10

11 Stock Yields Number of Shares x Price Per Share = Cost of All Shares Cost of All Shares + Expenses and/or Commissions = Total Cost of Stock Number of Shares x Annual Dividends = Total Annual Dividend Total Annual Dividend Total Cost of Stock = Annual Yield to Nearest Tenth Percent 11

12 Stock Sales Number of Shares x Market Price = Total Sale Total Sale Commission and Other Charges = Net Proceeds Net Proceeds Total Cost = Profit OR Total Cost Net Proceeds = Loss 12

13 Total Investment in a Mutual Fund MUTUAL FUNDS LESSON 7.7 Number of Shares x Net Asset Value (NAV) = Total Investment in No-Load Funds Number of Shares x Offer Price = Total Investment in Load Funds Amount and Rate of Commission Offer Price Net Asset Value (NAV) = Amount of Commission Commission Offer Price = Rate of Commission 13

14 Profit of Loss from Mutual Fund Investments Number of Shares x Net Asset Value (NAV) = Proceeds Proceeds Amount of Investment = Profit OR Amount of Investment Proceeds = Loss 14

15 REAL ESTATE LESSON 7.8 Net Income from Real Estate Annual Rental Income Annual Expenses = Net Income OR Annual Expenses Annual Rental Income = Net Loss 15

16 Rate of Return on Real Estate Annual Net Income Cash Investment = Rate of Return Cash Investment + Additional Cash Invested = Capital Investment in House Finding What Monthly Rent to Charge Cash Investment x Percent Desired to Earn = Desired Annual Net Income Desired Annual Net Income + Annual Expenses = Annual Rental Income Annual Rental Income 12 = Monthly Rent 16

17 RETIREMENT INVESTMENTS LESSON 7.9 Retirement Income Monthly Pension + Social Security = Retirement Income Desired Monthly Income Retirement Income = Amount Needed from IRA Amount Needed from IRA Amount of IRA Fund = Percent to Withdraw Each Month 17

18 Pension Income Number of Years of Service x Yearly Pension Rate = Total Pension Rate Final Average Salary x Total Pension Rate = Amount of Pension Withdrawals from a Retirement Investment IRA Balance Divisor from Table = Minimum Amount to be Withdrawn IRA Amount Withdrawn x 10% = Amount of Penalty 18