Question

Sarah, age 29, makes $45,000 a year and wants to buy a 15-year term policy that would replace seven years of her salary. The annual premium rate (per $1000 of face value) for her age group is $1.46. What is Sarah’s premium, to the nearest dollar?
a.
$460
b.
$215
c.
$66
d.
$986

Answer 1

Needed face = 7 × \$45,000 = \$315,000.
Premium = (\$315,000 / \$1,000) × \$1.46 = 315 × 1.46 = \$459.90 ≈ \$460.

Answer: (a) \$460.