Question

Tom Harris, a young father, is twenty-four years old. He wishes to purchase $7,000 of a ten-year term insurance. What will be his annual premium? 28.14 28.42 28.70 29.05

Answer 1

Option D is correct.

His Annual premium will be $29.05

Explanation:

Firstly, find the person age and the insurance rate by insurance rate by age chart under the correct policy.

As per the given statement: Tom Harris, a young father, is twenty-four years old.

A 24 years olds insurance rate is 4.15.

Also, it is given that he wishes to purchase $7,000 of a ten-year term insurance.

Next, take the face value of there policy and divide it by 1000.

$7,000 divided by 1000

i,e
`(\$7000)/(1000) = \$7`

then, lastly multiply the insurance rate with the answer to the division problem between the rate and the face value.

i.e

Annual premium =
`7 * 4.15 = \$29.05`

Therefore, his annual premium will be, $29.05