Question

Dad bought $200,000 of term life insurance at the rate of $5.40 per thousand-dollar unit. How much is the annual premium?

Answer 1

Answer:

It is clear that the annual premium = $1080

Explanation:

Given:

As the total term amount for life insurance is given in the question which is $200,000

rate per $1000 unit = $5.40

Simple Calculation Procedure to get the annual premium:

First step:  

Let’s assume $1000 is one unit and the mentioned rate per $1000 unit is $5.40. Now, all you need is to find total number of $1000 units in total term insurance amount ($200,000).  

So,  

divide $200,000 by $1000 to establish the total number of  

1000 units in $200,000 = $200,000/$1000 = 200  

Second step:

As 200 is found to be the total number of $1000 units in $200,000.

So, just multiply 200 with $5.40 to ultimately find the annual premium

            i.e. $5.40 × 200 = $1080

Hence, it is clear that the annual premium = $1080

Keywords: life insurance, annual premium, premium term rate

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