Question

Peter and Marcia, both age 34, can each pay $650 a year each on life insurance for themselves. About how much is the face value of the largest combination of policies they can buy?
For age 34, a 10-year term for male is 1.45 and for female is 1.24. A 20-year term for male is 1.89 and female is 1.46.
a.
$1,945,000
b.
$972,000
c.
$789,000
d.
$806,000

Answer 1

Choose the cheaper cost per $1,000 for each person (that's the 10-year term for both).

Peter (male): 650 / 1.45 ≈ 448.28 thousands → $448,280
Marcia (female): 650 / 1.24 ≈ 524.19 thousands → $524,190

Total ≈ $448,280 + $524,190 ≈ $972,470 ≈ $972,000

Answer: b. $972,000.