Question

Jacob wants to buy a $500,000 15-year term life policy, and the annual premium rate (per $1000 of face value) for his age group is $6.78. If Jacob lives until the end of the term of his policy, how much will Jacob have paid in premiums overall?
a.
$101,700
b.
$3,390
c.
$50,850
d.
$73,746

Answer 1

Each year Jacob pays (500,000/1,000) × \$6.78 = 500 × \$6.78 = \$3,390. Over 15 years he pays 15 × \$3,390 = \$50,850.

Answer: c. $50,850