AnswersMDVA Healthy Living Semester Only MChoosing a Tobacco-Free LifeQuestion 17
17
QuizMultiple Choice

Choosing a Tobacco-Free Life

Question 17 • {MDVA} Healthy Living [Semester Only] (M)

Angelo, age 40, is comparing the premium for a $125,000 whole life insurance policy he may take now and the premium for the same policy taken out at age 45. The Annual Life Insurance Premium (per $1000 of face value) for a 40-year-old male is 22.60 and for a 45-year-old male is 27.75. What would be the difference in total premium costs over 20 years for this policy at the two age levels?

Answer
A
$69,375
B
$11,725
C
$12,875
D
$644

Explanation

The difference in the annual rate is $27.75 − $22.60 = $5.15 per $1,000 of coverage. A $125,000 policy has 125 units of $1,000, so the annual premium difference is $5.15 × 125 = $643.75. Over 20 years, the difference is $643.75 × 20 = $12,875, so the correct choice is $12,875.

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