Question

Joshua is 25 years old and has a high risk job making $72,000 a year. The insurance company charges him an extra 20% on top of his premium rate because of his job. If Joshua wants a policy that will replace five years of his salary, what is the annual premium for the cheapest policy? For age 25, whole life for male is 15 dollars and 38 cents, 20-payment life is 26 dollars and 40 cents, and 20-year endowment is 34 dollars and 2 cents. A. $1,107 b. $1,328 c. $5,537 d. $6,644.

Answer 1

The correct answer is D. The annual premium for the cheapest policy is $6,644.

A life insurance policy can pay out in the event of the insured's death, whether or not before a specific date, or if the insured is alive on a specific date.

A life insurance policy can also be a mixture of both, in that case it pays out both when you are alive and when you die earlier. Finally, a life insurance policy can provide a periodic payment as long as the insured person is alive or precisely from the moment the insured person dies.

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