Questions: Question 27 of 100 Before he died, an annuitant had received 12,500 in monthly benefits from his 25,000 straight life annuity. He was also the insured under a 50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? A. 62,500 B. 75,000 C. 50,000 D. Nothing

Solution Steps

To determine how much the annuitant's spouse will receive in benefits, we need to consider both the straight life annuity and the paid-up whole life policy. The annuitant had received $12,500 from the $25,000 annuity, so the remaining amount from the annuity is $25,000 - $12,500. The spouse will also receive the full amount of the $50,000 whole life policy.

1. Calculate the remaining amount from the annuity.
2. Add the remaining annuity amount to the whole life policy amount to get the total benefits the spouse will receive.

The total amount of the straight life annuity is \( 25000 \). The annuitant has already received \( 12500 \) in benefits. Therefore, the remaining amount from the annuity is calculated as follows:

\[ \text{Remaining Annuity} = 25000 - 12500 = 12500 \]

The annuitant's spouse will receive the remaining amount from the annuity plus the full amount of the paid-up whole life policy, which is \( 50000 \). Thus, the total benefits received by the spouse can be expressed as:

\[ \text{Total Benefits} = \text{Remaining Annuity} + \text{Whole Life Policy} = 12500 + 50000 = 62500 \]

Final Answer