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
Max is 33 and smokes. How much would he save next year on a $75,000 policy if he quit smoking compared to if he continued smoking? Show your work or explain how you got your answer.
(4 points)
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
Max is 33 and smokes. How much would he save next year on a $75,000 policy if he quit smoking compared to if he continued smoking? Show your work or explain how you got your answer.
(4 points)
Answers
Answered by
GPT-4o mini
To calculate how much Max would save next year on a $75,000 life insurance policy if he quit smoking, we need to determine the monthly premiums for each scenario (as a smoker and as a nonsmoker), and then find the total cost for the year in both cases.
1. **Determine the monthly premium for a smoker male, age 33**:
- From the table, for a smoker male aged 31 to 40, the monthly premium is $9.00 for every $25,000 of coverage.
- Since Max wants a coverage of $75,000, we first find the number of $25,000 units in $75,000:
\[
\frac{75,000}{25,000} = 3
\]
- Now we multiply the monthly premium by 3:
\[
3 \times 9.00 = 27.00
\]
- So, the monthly premium if Max continues smoking is **$27.00**.
2. **Determine the monthly premium for a nonsmoker male, age 33**:
- From the table, for a nonsmoker male aged 31 to 40, the monthly premium is $5.50 for every $25,000 of coverage.
- Using the same calculation for $75,000:
\[
3 \times 5.50 = 16.50
\]
- So, the monthly premium if Max quits smoking is **$16.50**.
3. **Calculate the yearly premiums for both scenarios**:
- Yearly premium as a smoker:
\[
27.00 \times 12 = 324.00
\]
- Yearly premium as a nonsmoker:
\[
16.50 \times 12 = 198.00
\]
4. **Calculate the savings for the year**:
- To find how much Max would save by quitting smoking, subtract the yearly premium as a nonsmoker from the yearly premium as a smoker:
\[
324.00 - 198.00 = 126.00
\]
Thus, Max would save **$126.00** next year on a $75,000 policy if he quit smoking compared to if he continued smoking.
1. **Determine the monthly premium for a smoker male, age 33**:
- From the table, for a smoker male aged 31 to 40, the monthly premium is $9.00 for every $25,000 of coverage.
- Since Max wants a coverage of $75,000, we first find the number of $25,000 units in $75,000:
\[
\frac{75,000}{25,000} = 3
\]
- Now we multiply the monthly premium by 3:
\[
3 \times 9.00 = 27.00
\]
- So, the monthly premium if Max continues smoking is **$27.00**.
2. **Determine the monthly premium for a nonsmoker male, age 33**:
- From the table, for a nonsmoker male aged 31 to 40, the monthly premium is $5.50 for every $25,000 of coverage.
- Using the same calculation for $75,000:
\[
3 \times 5.50 = 16.50
\]
- So, the monthly premium if Max quits smoking is **$16.50**.
3. **Calculate the yearly premiums for both scenarios**:
- Yearly premium as a smoker:
\[
27.00 \times 12 = 324.00
\]
- Yearly premium as a nonsmoker:
\[
16.50 \times 12 = 198.00
\]
4. **Calculate the savings for the year**:
- To find how much Max would save by quitting smoking, subtract the yearly premium as a nonsmoker from the yearly premium as a smoker:
\[
324.00 - 198.00 = 126.00
\]
Thus, Max would save **$126.00** next year on a $75,000 policy if he quit smoking compared to if he continued smoking.
There are no human answers yet. A form for humans to post answers is coming very soon!