Luz, who is 45 years old, is deciding between two term life insurance policies. Both offer a $350,000 death benefit, but the premiums differ based on age and term length. Option 1: 15-year term life policy Monthly premium: $40 Coverage: 15 years Death benefit: $350,000 Option 2: 25-year term life policy Monthly premium: $60 Coverage: 25 years Death benefit: $350,000 What is the total cost for each option?
Answer
A
$5,400 for Option 1; $16,500 for Option 2
B
$8,400 for Option 1; $21,000 for Option 2
C
$9,000 for Option 1; $20,000 for Option 2
D
$7,200 for Option 1; $18,000 for Option 2
Explanation
To find each total cost, multiply the monthly premium by 12 months per year and the term length. Option 1 costs $40 × 12 × 15 = $7,200; Option 2 costs $60 × 12 × 25 = $18,000. Therefore, the correct choice is $7,200 for Option 1 and $18,000 for Option 2.
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