The sample life insurance premium table illustrates the monthly premium for every $25,000 of coverage.
Age Nonsmoker Male Nonsmoker Female Smoker Male Smoker Female
Under 24 $3.00 $2.50 $4.50 $4.00
24 to 30 $4.00 $3.50 $6.15 $5.25
31 to 40 $5.50 $4.40 $9.00 $6.50
41 to 50 $7.50 $6.75 $13.00 $12.00
What is the insurance premium for a 42-year-old nonsmoking female who wants $125,000 in coverage?
a.$33.75
b. $41/50
c. $58.25
d. $60.00
To calculate the insurance premium for a 42-year-old nonsmoking female who wants $125,000 in coverage:
First, determine the premium for every $25,000 of coverage for a 41 to 50-year-old nonsmoking female. The premium is $6.75.
Since the individual wants $125,000 in coverage, divide $125,000 by $25,000 to get 5.
Now, multiply the premium for every $25,000 of coverage by 5 to get:
$6.75 * 5 = $33.75
Therefore, the insurance premium for a 42-year-old nonsmoking female who wants $125,000 in coverage is $33.75.
The correct answer is a. $33.75.