A 26-year-old male is interested in purchasing life insurance. Using the table, determine what the annual premium for a 20-Payment Life insurance policy, given that the face value of the policy is $89,657. If need be, round your answer to the nearest cent.
a.
$2,546.26
c.
$2,687.02
b.
$2,609.92
d.
$2,750.68

The annual premium for a 20-Payment Life insurance policy, given that the face value of the policy is $89,657 for the 26-year-old male will be $2609.62. Hence, option B is the right choice.

What exactly do you mean by insurance?

Insurance is a tool for reducing risk. When you buy insurance, you're buying protection against potential disasters. If anything horrible happens to you, the insurance company compensates you or someone you pick on behalf of you as your nominee.

How do we solve the given question?

In the question, we are asked to calculate the annual premium for a 20-Payment Life Insurance Policy, for a 26-year-old male, who is interested in buying this policy at the face value of $89,657.

We know that the Annual Premium = (Face Value*Rate)/1000

or, The annual premium = $(89,657*29.11)/1000 (Taking rate = $29.11 as given in the table for a 26-year male for a 20-Payment Life insurance),

or, The annual premium = $2,609.92.

∴ The annual premium for a 20-Payment Life insurance policy, given that the face value of the policy is $89,657 for the 26-year-old male will be $2609.62. Hence, option B is the right choice.

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