CFA institute portfolio management question

CFA Level I Portfolio Management
#1

Hi all

Perrin’s Life Insurance Policy

Face value $500,000
Annual premium (paid at beginning of the year) $12,000
Policy dividends anticipated per year (paid at end of the year) $2,000
Cash value projected at the end of 20 years $47,000

In the calculations provided in the answer the cash value was not taken into account to give the cost per year that needed to be paid. Why is this?

#2

The cash value (less any surrender charges, market value adjustment, etc) is paid to the policyholder on surrender. Once surrendered, there is no more insurance contract.