The sample life insurance premium table illustrates the monthly premium for every $25,000 of coverage.
Mateo, a 31-year-old nonsmoker, wants to purchase $100,000 in coverage for himself and $75,000 for his spouse, who is female, 30 years old, and does not smoke. What will the insurance premium be?
A.
$30.50
B.
$32.50
C.
$35.50
D.
$36.00
Using the sample life insurance premium table, we can find the premium for $25,000 of coverage for a 31-year-old nonsmoking male (Mateo) and a 30-year-old nonsmoking female (his spouse). We then multiply this premium by 4 for Mateo's coverage ($100,000/$25,000) and by 3 for his spouse's coverage ($75,000/$25,000) and add them together:
For Mateo:
Premium for $25,000 coverage = $7.70
Premium for $100,000 coverage = $7.70 x 4 = $30.80
For his spouse:
Premium for $25,000 coverage = $6.50
Premium for $75,000 coverage = $6.50 x 3 = $19.50
Total premium = $30.80 + $19.50 = $50.30
Rounded to the nearest dollar, the premium will be $50. Therefore, the answer is not given in the options provided.