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nordsb [41]
3 years ago
5

A non-smoker that is 30 years old pays a 25% lower premium for life insurance than a smoker of the same age. If the smoker pays

$125 per month for a $500,000 policy, how much does the non-smoker pay per month
Business
1 answer:
GrogVix [38]3 years ago
5 0

The amount that the non-smoker pays per month for premium is $31.25.

<h3>What is the determinant of the premium?</h3>

Generally, in an insurance, the person that smokes will pay higher premiums for life insurance than a non-smoker.

Now, it is given that the non-smokers pays a 25% lower premium for life insurance, that is, 1/4 of the normal premium he is suppose to pay.

Because the smoker present a high risk, he will pay the full premium to cater for high risk situation on the policy.

Premium payable = $125 * 1/4

Premium payable = $31.25

Therefore, the answer is $31.25 for the non-smoker.

Read more about insurance premium

<em>brainly.com/question/25280754</em>

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