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
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
To calculate the insurance premium for Mateo and his spouse, we must first calculate the premium for Mateo's coverage and then add the premium for his spouse's coverage.
For Mateo:
31-40 age bracket for a nonsmoker male is $5.50 for every $25,000 of coverage.
Mateo wants $100,000 in coverage, so 100,000 / 25,000 = 4 (number of $25,000 increments).
4 * $5.50 = $22.00 premium for Mateo's coverage.
For Mateo's spouse:
24-30 age bracket for a nonsmoker female is $3.50 for every $25,000 of coverage.
Mateo's spouse wants $75,000 in coverage, so 75,000 / 25,000 = 3 (number of $25,000 increments).
3 * $3.50 = $10.50 premium for Mateo's spouse's coverage.
Total premium = $22.00 (Mateo) + $10.50 (Mateo's spouse) = $32.50
Therefore, the insurance premium for Mateo and his spouse will be $32.50, which means the correct answer is b. $32.50.