Because aaron, age 32, is a smoker, he must pay more for life insurance. given that company a charges 20% more for smokers, company b charges 18% more for smokers, company c charge 25% more for smokers and company d charges 15% more for smokers, aaron decides to buy his $250,000 policy from company b. which of the following statements is true? (a) aaron is paying the smallest premium possible with company b.(b) aaron is paying $93 more in premiums than he would with company a.(c) aaron is paying $129 more in premiums than he would with company c.(d) aaron could have chosen any company because the premiums are all the same.

Option A is correct.

Aaron is paying the smallest premium possible with Company B

Step-by-step explanation:

Lets solve for all four companies and then find the answer.

Company A premium.

Face value = 1.86

Charges = 20% = 0.2

Charges = 0.2*250000 = $50000

Total charge = Charge × face value

= 50000 × 1.86 = $93000

Company B premium.

Face value = 1.86

Charges = 18% = 0.18

Charges = 0.18*250000 =  $45000

Total charge = Charge × face value

= 45000 × 1.86 = $83700

Company C premium

Face value = 2.07

Charges = 25% = 0.25

Charges = 0.25*250000 =  $62500

Total charge = Charge × face value

= 62500 × 2.07 = $129375

Company D premium

face value = 2.25

Charges = 15% = 0.15

Charges = 0.15*250000 = $37500

Total charge = Charge × face value

= 37500 × 2.25 = $84375

Therefore option A is correct.

Aaron is paying the smallest premium possible with Company B

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step-by-step explanation:

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