After getting married, Joe, 32, and Melinda, 29, decide to take out life insurance policies.  Joe would like a 15-year term policy and Melinda would like a 20-year term policy.  They each want a $300,000 policy.  How much can Joe and Melinda expect to pay in premiums the first year? a. $2,478 b. $2,484 c. $1,488 d. $2,409

Respuesta :

B.$2,484 is the correct answer.

Based on their ages and cost of insurance for their age and length of policy, the total premium for the year would be B. $2,484.

Joe annual premium

= Cost for 32 year old with 15 year policy x Policy amount / 1,000

= 3.32 x 300,000 / 1,000

= $996

Melinda annual premium

= Cost for 29 year old with 20 year policy x Policy amount / 1,000

= 4.96 x 300,000 / 1,000

= $1,488

Total annual premium

= Joe premium + Melinda premium

= 996 + 1,488

= $2,484

In conclusion, the total premium would be $2,484.

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