Answered

Use the table below to find the yearly premiums in each of the following cases.

George Anderson takes out \[tex]$30,000 of a twenty-payment life insurance. If he is thirty-six years old, what annual premium does he pay?

\begin{tabular}{|c|c|c|c|c|}
\hline \multicolumn{5}{|c|}{\begin{tabular}{l}
Typical Annual Life Insurance Premiums \\
for Males, per \$[/tex]1,000 Face Value
\end{tabular}} \\
\hline Age & \begin{tabular}{l}
10-Year \\
Term
\end{tabular} & \begin{tabular}{l}
Ordinary \\
Whole Life
\end{tabular} & \begin{tabular}{l}
20-Payment \\
Life
\end{tabular} & \begin{tabular}{l}
20-Year \\
Endowment
\end{tabular} \\
\hline 30 & 4.87 & 14.78 & 24.12 & 43.05 \\
\hline 31 & 5.07 & 15.33 & 24.75 & 43.19 \\
\hline 32 & 5.29 & 15.90 & 25.40 & 43.33 \\
\hline 33 & 5.54 & 16.50 & 26.06 & 43.48 \\
\hline 34 & 5.81 & 17.13 & 26.76 & 43.64 \\
\hline 35 & 6.11 & 17.81 & 27.48 & 43.81 \\
\hline 36 & 6.43 & 18.52 & 28.23 & 44.00 \\
\hline 37 & 6.76 & 19.26 & 28.99 & 44.19 \\
\hline 38 & 7.12 & 20.04 & 29.79 & 44.40 \\
\hline 39 & 7.53 & 20.87 & 30.62 & 44.63 \\
\hline \multicolumn{5}{|c|}{\begin{tabular}{l}
Notes: (1) For semiannual premiums, use [tex]$51 \%$[/tex] of the annual rate. \\
(2) For quarterly premiums, use [tex]$26 \%$[/tex] of the annual rate. \\
(3) For monthly premiums, use [tex]$9 \%$[/tex] of the annual rate. \\
(4) For females, use the age of a male three years younger.
\end{tabular}} \\
\hline
\end{tabular}

A. 1,320
B. 846.90
C. 824.40
D. 555.60



Answer :

To determine the annual premium that George Anderson will need to pay for his twenty-payment life insurance with a face value of [tex]$30,000 at the age of 36, we can use the information provided in the given table. Step-by-Step Solution: 1. Identify the relevant information from the table: From the table, we look for the annual premium per $[/tex]1,000 of face value for a 36-year-old male under the "20-Payment Life" column. The value listed is [tex]$28.23. 2. Determine the face value of the policy: George has taken out a life insurance policy with a face value of $[/tex]30,000.

3. Calculate the total annual premium:
The annual premium rate given in the table is per [tex]$1,000 of face value. Therefore, we need to scale this rate according to George's policy face value. - We divide the face value by $[/tex]1,000 to find the number of [tex]$1,000 units in the policy: \[ \frac{30,000}{1,000} = 30 \] - Next, we multiply the number of $[/tex]1,000 units by the annual premium rate per [tex]$1,000 from the table: \[ 30 \times 28.23 = 846.90 \] Thus, the correct annual premium that George Anderson must pay for his twenty-payment life insurance is \$[/tex]846.90.