Question

matthew, a 37 - year - old man, is a mechanical engineer. jenna, a 40 - year - old woman, is a financial adviser. both are purchasing a variable life insurance policy. both policies offer a $600,000 death benefit, but the premiums differ based on age, occupation, and gender.

• matthews policy:
• monthly premium: $220
• duration: 25 years
• death benefit: $600,000
• jennas policy:
• monthly premium: $250
• duration: 25 years
• death benefit: $600,000

what is the difference between matthews and jennas total premiums?

Explanation:

Step1: Calculate Matthew's total premium

First, find the number of months in 25 years. Since there are 12 months in a year, the number of months \(n = 25\times12=300\) months.
Matthew's monthly premium is \(P_{M}=\$220\).
His total premium \(T_{M}=P_{M}\times n = 220\times300=\$66000\)

Step2: Calculate Jenna's total premium

Jenna's monthly premium is \(P_{J}=\$250\).
Using the same number of months \(n = 300\) (25 years).
Her total premium \(T_{J}=P_{J}\times n=250\times300 = \$75000\)

Step3: Find the difference

The difference \(D=T_{J}-T_{M}\)
\(D = 75000 - 66000=\$9000\)

Answer:

\(\$9000\)