[You are given the following info about a "Type 2" universal life insurance
policy:
Death Benefit: $100,000
Cash Value: $40,000
Monthly mortality charge: $25
Using the procedure described by H&H, determine the monthly mortality rate per
$1,000 coverage.]
the answer is given as B : "At least $0.20, but less than $0.30:
Presumably the answer is derived by dividing the mortality charge by the "Death
benefit (000)" = 25/100 =.25
My problem with this is that H&H seems clear that even for a type 2 policy the
"death benefit" is composed of two components: the cash value and the pure
protection (or amount at risk). So for this type 2 policy the amount at risk is
always $60K which implies an aswer of .42