If jesse wants to buy a $75,000 10-year term life insurance policy, and the annual premium rate (per $1000 of face value) for his age group is $2.34, how much is jesse’s annual premium? a. $175.50 b. $3,205.12 c. $234.00 d. $1,755.00

Option a. $175.50 is correct.

Step-by-step explanation:

It is given that it costs $2.34 for every $1,000 face value and Jesse wants to buy a policy of $75,000.

To get the annual premium rate we use the formula:

A = (Benefit Volume / Face Value) (Annual Premium Rate)

Benefit Volume = $75,000

Face Value = $1,000

Annual Premium Rate = $2.34

Putting the values in the formula :

A = ($75,000 ÷ $1000) ($2.34)

A = 75 × 2.34

A = $175.50

The annual premium is $175.50