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.
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