4
QuizMultiple Choice

Life Insurance

Question 4 • Financial Math - MA2007

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?

Answer
A
$101,700
B
$3,390
C
$50,850
D
$73,746

Explanation

The $500,000 policy has 500 units of $1,000. At $6.78 per unit, Jacob’s annual premium is 500 × $6.78 = $3,390. Over 15 years, he pays $3,390 × 15 = $50,850, so the correct choice is $50,850.

AI-written and checked against the verified answer.

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