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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