FAQ 328: Insured death benefit - Term Cost

Problem:

I would like to calculate the cost of insurance for someone with say a 55,000 face amount using the PS58 tables.

On the plan specs under insurance I have the PS58 table chosen and in the employee screen I have the 55,000 entered in as prior face amount.

What else do I need to do or what should I not do?



Solution:

Code your face amount in a history record (be sure to code an insurance issue date in the history record also), and code in PS58 under table in this same history record. If you have a number of people you can use the set column data feature of the grid to copy prior face to the history record field. Next go to Calculations/Actuarial/Reconstruct from History and select Face amount & premium. You will need to run the Reconstruct program each year to update to the term rate for the current age at valuation.
The IRS published updated rates in 2001. The new rates are available for download from the ASC website. The file is named tbl2001.zip. This unzips to a file named Platter5.bs2. Copy this file to the ASC directory, replacing the existing platter.bs2 file. Open text based ASC and run 0 - I then select Other tables. Copy from D15 to D21 and DO NOT scratch the Control file. You can answer No to copying all tables except the Insurance tables. Once this utility is run you should be able to open Windows ASC & find the Insurance table named TBL2001 which contains the new term rates.