Cloe is a 40 year old female in search of a $100,000 life insurance policy to meet her familys financial needs in the unlikely case of her untimely demise. An insurance agent show her premium and benefit tables for three policies (below): an Annual Renewable Term Life policy, a Straight Term Life policy, and a Whole Life policy (Tables 1, 2, and 3 respectively). What would Cloe expect to pay in the first year of each policy if she is interested in coverage for the next 20 years? Explain what each policy offers that explains why they have different premiums.

Table 1

Annual Renewable Term Life Insurance Premiums: $100,000 Policy, Preferred Nonsmoker Rates
Policy Year	Age 25	Age 40	Age 60
	Female	Female	Female
1	$143	$178	$471
5	150	225	685
10	163	264	1,108
15	176	330	1,811
20	225	443	na

Table 2

Representative Level Premiums Term Life Rates: $100,000 Policy, Preferred Nonsmoker Rates
	10 Year	15 Year	20 Year	30 Year
Age	Female	Female	Female	Female
25	$108	$108	$108	$139
40	135	145	161	195
60	324	412	545	na

Table 3

Representative Whole Life Insurance Annual Premiums: $100,000 Policy, Preferred Nonsmoker Rates
	Annual Premiums	Premiums Paid through Year 20	Cash Value at Year 20	Dividend Value at Year 20	Paid-up Insurance at Year 20
Age	Female	Female	Female	Female	Female
25	$956	$19,120	$15,073	$5,240	$19,728
40	1,499	29,980	25,496	6,439	14,965
60	3,562	71,240	47,083	29,183	39,221