Question

Use the table to answer the question.
The sample life insurance premium table illustrates the monthly
premium for every $25,000 of coverage.
Nonsmoker
Nonsmoker
Smoker Smoker
Age
Male
Female
Male
Female
Under
$3.00
$2.50
$4.50
$4.00
24
24 to
$4.00
$3.50
$6.15
$5.25
30
31 to
$5.50
$4.40
$9.00
40
$6.50
41 to
$7.50
$6.75
$13.00
50
$12.00
Chloe is 25 and smokes. How much would she save a year on a
$100,000 policy
if she quit smoking? Show your work or explain
how you got
your answer.

Answer 1

Answer:

$84 per year

Step-by-step explanation:

For a $100,000 policy, let's compare the monthly premiums for a 25-year-old smoker female and a nonsmoker female:

Smoker Female: $5.25 per 25,000 of coverage

Nonsmoker Female: $3.50 per 25,000 of coverage

Since Chloe is 25 years old and smokes, her monthly premium for a $100,000 policy is:

$\boxed{ \ 5.25 × 4 = \ 21}$

If Chloe quits smoking, her monthly premium would be the nonsmoker rate, which is $3.50 per $25,000 of coverage.

So, her new monthly premium after quitting smoking would be:

$\boxed{ \ 3.50 × 4 = \ 14}$

To find out how much she would save in a year, we calculate the difference in the yearly premiums:

$\begin{aligned} \textsf{Yearly savings} & = (\textsf{Smoker premium} - \textsf{Nonsmoker premium}) \times 12 \\\\ & = (\ 21 - \ 14) \times 12 \\\\ & = \ 7 \times 12 \\\\ & = \ 84 \end{aligned}$

Therefore, Chloe would save $84 per year on a 100,000 policy if she quit smoking.

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Answer 2

Answer:

$84

Step-by-step explanation:

Chloe is 25 years old, so her age places her in the second row of the given table (24 to 30 years).

The monthly premium for every $25,000 of coverage for a female smoker of age 24-30 years is $5.25, whereas for a female non-smoker in the same age bracket it is reduced to $3.50.

To determine how much Chloe would save if she quit smoking, we need find the difference between the smoker and non-smoker premiums, multiply the result by 4 to account for $100,000 of cover, then multiply by 12 to account for the yearly saving.

$\textsf{Savings}=(\ 5.25-\ 3.50) \times 4 \times 12\\\\\textsf{Savings}=\ 1.75 \times 4 \times 12\\\\\textsf{Savings}=\ 7 \times 12\\\\\textsf{Savings}=\ 84$

Therefore, Chloe would save $84 each year on a $100,000 policy if she quit smoking.