## Related questions with answers

Use Table discussed earlier to find the annual premium of each of the following life insurance policies:

$\begin{array}{} \begin{array}{}\text{Sex} \end{array}& \begin{array}{}\text{Age} \end{array}& \begin{array}{}\text{Policy type}\end{array}& \begin{array}{}\text{Rate classification} \end{array}& \begin{array}{}\text{Face Value}\end{array}& \begin{array}{}\text{Annual premium}\end{array}&\\ \text{Female}&30&\text{Whole-life}&\text{NT}&\$200,000 \end{array}$

Solutions

VerifiedLet $FV$ be a face value and $r$ be the rate. To find the annual premium for a 30-year-old female where we have a face value of $\$200,000$ using a non-tobacco rate for a whole life term and we let $P_A$ be the annual premium, we have

$\begin{aligned} P_A&=\frac{FV}{1,000}\cdot r\\ &=\frac{200,000}{1,000}\cdot10.56\\ &=200\cdot10.56\\ &=2,112 \end{aligned}$

Therefore, the annual premium for a $\$200,000$ whole life level term policy is $\$2,112.00$.

To solve the *Estimated Annual Premium*, we have the formula:

$\begin{aligned} \text{Estimated Annual Premium}=\dfrac{\text{Face Value}}{\$1,000}\times \text{rate}&&\textcolor{#19804f}{[1]} \end{aligned}$

Since we are given the face value, we need to look for the corresponding rate.

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