In the monthly installment scenario used for cash surrender value calculation, what was the monthly installment amount?

• A. 5,000
• B. 10,000
• C. 20,000
• D. 30,000

Answer: (B)

The calculation rests on the monthly cash flow used in the scenario to build the policy’s surrender value. In this problem, the monthly premium installment used for the cash surrender value calculation is set at 10,000. That figure is the building block for the accumulation and interest credits that determine the surrender value, so the worked example uses 10,000 as the monthly amount. Using a different premium amount would change the streams of premium payments, their accumulation, and the resulting surrender value, making the result inconsistent with the given scenario. The other numbers don’t fit the specified cash flow pattern, while the 10,000 figure aligns with the scenario’s stated monthly installment.