We appreciate your visit to The Durham Insurance Company sells a five year term insurance policy with a face value of tex 100 000 tex to a 47 year old. This page offers clear insights and highlights the essential aspects of the topic. Our goal is to provide a helpful and engaging learning experience. Explore the content and find the answers you need!
Answer :
Sure! Let's go through each part of the question step-by-step.
a) Find the value of [tex]\(x\)[/tex] from the table:
The mortality rate for age [tex]\( \geq 51 \)[/tex] is indicated as [tex]\( x \)[/tex], meaning it is not specifically provided in the table, hence considered "Not provided".
b) Sum total of the payments made:
The man pays a monthly premium of [tex]$63 for his insurance policy. He makes 15 payments before he passes away. To find the total sum of payments he made, we multiply the monthly premium by the number of payments:
\[
\text{Total Payments} = 63 \times 15 = \$[/tex]945
\]
c) Amount the beneficiaries receive upon his death:
The face value of the insurance policy is [tex]$100,000. This is the amount the beneficiaries receive when the insured person passes away.
\[
\text{Beneficiaries Receive} = \$[/tex]100,000
\]
d) Insurance company's profit on this policy:
The profit for the insurance company can be calculated by subtracting the total payments made by the insured from the amount paid to the beneficiaries. In this case:
[tex]\[
\text{Company's Profit} = \text{Total Payments} - \text{Beneficiaries Receive} = 945 - 100,000 = -\$99,055
\][/tex]
This shows a loss because the company pays out more than what they collected in premiums.
e) Number of men expected to die at age 50:
Given that the mortality rate for men age 50 is 0.0043, we can calculate how many of the 8,000 men are expected to die using the mortality rate:
[tex]\[
\text{Men Dying at Age 50} = 0.0043 \times 8000 = 34.4 \approx 34
\][/tex]
So, approximately 34 men would die at age 50.
f) Annual premium for this policy:
The monthly premium is [tex]$63, so to find the annual premium, we multiply the monthly premium by 12 (the number of months in a year):
\[
\text{Annual Premium} = 63 \times 12 = \$[/tex]756
\]
I hope this breakdown helps you understand how each part of the question is solved!
a) Find the value of [tex]\(x\)[/tex] from the table:
The mortality rate for age [tex]\( \geq 51 \)[/tex] is indicated as [tex]\( x \)[/tex], meaning it is not specifically provided in the table, hence considered "Not provided".
b) Sum total of the payments made:
The man pays a monthly premium of [tex]$63 for his insurance policy. He makes 15 payments before he passes away. To find the total sum of payments he made, we multiply the monthly premium by the number of payments:
\[
\text{Total Payments} = 63 \times 15 = \$[/tex]945
\]
c) Amount the beneficiaries receive upon his death:
The face value of the insurance policy is [tex]$100,000. This is the amount the beneficiaries receive when the insured person passes away.
\[
\text{Beneficiaries Receive} = \$[/tex]100,000
\]
d) Insurance company's profit on this policy:
The profit for the insurance company can be calculated by subtracting the total payments made by the insured from the amount paid to the beneficiaries. In this case:
[tex]\[
\text{Company's Profit} = \text{Total Payments} - \text{Beneficiaries Receive} = 945 - 100,000 = -\$99,055
\][/tex]
This shows a loss because the company pays out more than what they collected in premiums.
e) Number of men expected to die at age 50:
Given that the mortality rate for men age 50 is 0.0043, we can calculate how many of the 8,000 men are expected to die using the mortality rate:
[tex]\[
\text{Men Dying at Age 50} = 0.0043 \times 8000 = 34.4 \approx 34
\][/tex]
So, approximately 34 men would die at age 50.
f) Annual premium for this policy:
The monthly premium is [tex]$63, so to find the annual premium, we multiply the monthly premium by 12 (the number of months in a year):
\[
\text{Annual Premium} = 63 \times 12 = \$[/tex]756
\]
I hope this breakdown helps you understand how each part of the question is solved!
Thanks for taking the time to read The Durham Insurance Company sells a five year term insurance policy with a face value of tex 100 000 tex to a 47 year old. We hope the insights shared have been valuable and enhanced your understanding of the topic. Don�t hesitate to browse our website for more informative and engaging content!
- Why do Businesses Exist Why does Starbucks Exist What Service does Starbucks Provide Really what is their product.
- The pattern of numbers below is an arithmetic sequence tex 14 24 34 44 54 ldots tex Which statement describes the recursive function used to..
- Morgan felt the need to streamline Edison Electric What changes did Morgan make.
Rewritten by : Barada
