Question Use the table to answer the question. 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 Chloe is 25 and smokes. How much would she save a year on a $100,000 policy if she quit smoking? Show your work or explain how you got your answer. (4 points)

Question

use this to answer the question:
$/$ = units of coverage
Use the premium amounts for the 34-year-old male:
Smoker: Row 3, Column 3 shows $ per $ so $() = $ per month.
$() = $ per year
Non-Smoker: Row 3, Column 1 shows $ per $ so $() = $ per month.
$() = $ per year

Answer 1

To determine how much Chloe would save in a year on a $100,000 policy if she quit smoking, we will follow these steps:

1. Find the monthly premium for a smoking female:

   • According to the table, for females ages 24 to 30 who smoke, the monthly premium per $25,000 of coverage is $5.25. Since Chloe is under 30, we will use this amount.
   • For a $100,000 policy, which is equal to 4 units of $25,000: $$\text{Monthly premium for smoker}=4\times 5.25=21.00$$

2. Calculate the yearly premium for a smoking female:

   • To find the yearly premium, we multiply the monthly premium by 12: $$\text{Yearly premium for smoker}=21.00\times 12=252.00$$

3. Find the monthly premium for a non-smoking female:

   • According to the table, for non-smoking females ages 24 to 30, the monthly premium per $25,000 of coverage is $3.50.
   • For a $100,000 policy, which also equals 4 units of $25,000: $$\text{Monthly premium for non-smoker}=4\times 3.50=14.00$$

4. Calculate the yearly premium for a non-smoking female:

   • To find the yearly premium, we multiply the monthly premium by 12: $$\text{Yearly premium for non-smoker}=14.00\times 12=168.00$$

5. Calculate the savings from quitting smoking:

   • Now, to find how much Chloe would save by quitting smoking, we subtract the non-smoker premium from the smoker premium: $$\text{Savings}=252.00-168.00=84.00$$

Therefore, if Chloe quit smoking, she would save $84.00 per year on her $100,000 life insurance policy.