Carleton Financial Computations Homepage

Types of MOB Life Premium Calculations

4) Truncated Coverage Options

$70,000 Loan
12% Simple Interest
120 Month Loan Term / 60 Month Insurance Term

A) $1,065.00 payment during first 60 months w/insurance
B) $1,003.60 payment for remaining 60 months of transaction

5) End of Month Insurance Posting (Hybrid Approach)

Premium is posted at the end of each monthly period regardless of when scheduled payment is due.
Monthly Premium amount earns interest between EOM and payment due date.
NOT single premium but violates interest earning assumption of traditional MOB calculation.

Hybrid – Premium Posted at EOM

		Payment Allocation
Date	Payment	Insurance (1)	Interest (2)	Principal (3)	Outstanding Balance
1/31/2002	$0.00	$7.69	$0.00	$0.00	$10,000.00
2/15/2002	$226.18	$0.00	$147.95	$70.54	$9,929.46	$10,000 Cash Amount 12% Simple Interest 60 Payments Life Rate $.7
2/28/2002	$0.00	$7.64	$0.00	$0.00	$9,929.46
3/15/2002	$226.18	$0.00	$91.41	$127.13	$9,802.33
3/31/2002	$0.00	$7.54	$0.00	$0.00	$9,802.33
4/15/2002	$226.18	$0.00	$99.90	$118.74	$9,683.59
4/31/2002	$0.00	$7.45	$0.00	$0.00	$9,683.59
5/15/2002	$226.18	$0.00	$95.51	$123.22	$9,560.37
5/31/2002	$0.00	$7.35	$0.00	$0.00	$9,560.37
6/15/2002	$226.18	$0.00	$97.44	$121.39	$9,438.98
6/30/2002	$0.00	$7.26	$0.00	$0.00	$9,438.98
7/15/2002	$226.18	$0.00	$93.10	$125.82	$9,313.16
Thru the first 12 posting periods

		$44.93			$116,142.62
					Month Dollars of Coverage