The Mutual Assurance and Life Company is offering an insurance policy under either of the following two terms:

Question

a. Make a series of 12 payments of 1,200 at the beginning of each of the next 12 years (the first payment being made today)

b. Make a single lump-sum payment today of 10,000 and receive coverage for the next 12 years

If you had investment opportunities offering an 8 percent annual return which alternative would you prefer?

Answer 1

a) is just the present value of an "annuity" and its value is
1200 + 1200[1 - 1.08^-11]/.08

b) is rather vague.
what is the coverage, is it $10,000?
What actuarial tables are used? (they are a factor of date, country, sex, etc)

If you are studying actuarial math, then there should be formulas for the present value of a term insurance in terms of D_{x and Nx}