Question

Because Aaron, age 32, is a smoker, he must pay more for life insurance. Given that Company A charges 20% more for smokers, Company B charges 18% more for smokers, Company C charge 25% more for smokers and Company D charges 15% more for smokers, Aaron decides to buy his $250,000 policy from Company B. Which of the following statements is true? A 5-column table with 3 rows titled Annual Insurance Premiums (per 1,000 dollars of face value) 10 year term. Column 1 is labeled age with entries 30, 31, 32. Column 2 is labeled Company A with entries 1.30, 1.57, 1.86. Column 3 is labeled Company B with entries 1.29, 1.55, 1.86. Column 4 is labeled Company C with entries 1.40, 1.64, 2.07. Column 5 is labeled Company D with entries 1.49, 1.88, 2.25. a. Aaron is paying the smallest premium possible with Company B. b. Aaron is paying $93 more in premiums than he would with Company A. c. Aaron is paying $129 more in premiums than he would with Company C. d. Aaron could have chosen any company because the premiums are all the same.

Answer 1

A

Explanation:

Answer 2

d. Aaron could have chosen any company because the premiums are all the same.

Explanation:

Going by the age of Aaron and the percentages charged by the various company due to smoking, it is safe to conclude that, the premiums are all the same. This could be seen in the table of column and rows which shows the annual insurance premiums (per 1,000 dollars of face value) over a 10 years term. The variation helps to show that, when the premium is evaluated, the are all the same.