4 percent of a certain company's life insurance policy holders are smokers. For each nonsmoker the...
4 percent of a certain company's life insurance policy holders are smokers. For each nonsmoker the probability of dying during the year is 0.011. For each smoker the probability of dying during the year is 0.04. Round your answers to at least 4 decimal places. [a]Find the probability that a randomly selected policyholder died last year. [b]Find the probability that a randomly selected policy holder who died last year was a smoker.
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4 percent of a certain company's life insurance policy holders
are smokers. For each nonsmoker the...
An insurer has a portfolio of 1000 one-year term life insurance policies just issued to 1000...
An insurer has a portfolio of 1000 one-year term life insurance policies just issued to 1000 different (independent) individuals. Each policy will pay $1000 in the event that the policy holder dies within the year. For 500 of the policies, the probability of death is 0.01 per policyholder, and for the other 500 policies the probability of death is 0.02 per policyholder. Find the expected value and the standard deviation of the aggregate claim that the insurer will pay.
Annual claims filed by a policy holder of an insurance company have a Poisson distribution with...
Annual claims filed by a policy holder of an insurance company have a Poisson distribution with mean 0.4. The number of claims filed by two different policy holders are independent events. What is the probability that at least three out of ten policy holders each file at least one claim in a year?
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum...
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum of money upon the death of the policy holder. These policies have premiums that must be paid annually. Suppose a life insurance company sells a $230,000 one year term life insurance policy to a 49-year-old female for $527. According to the National Vital Statistics Report, Vol. 47, No. 28, the probability the female will survive the year is 0.99791. Compute the expected value of...
A dental insurance policy covers three procedures: orthodontics, filling, and extractions. During the life of the...
A dental insurance policy covers three procedures: orthodontics, filling, and extractions. During the life of the policy, the probability that the policyholder needs: Orthodontic work is 1/2 Orthodontic work or a filling is 2/3 Orthodontic work or an extraction is 3/4 A filling and an extraction is 1/8 The need for orthodontic work is independent of the need for a filling and is independent of the need for an extraction. Calculate the probability that the policyholder will need a filling...
Insurance companies track life expectancy information to assist in determining the cost of life insurance policies....
Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. The insurance company knows that, last year, the life expectancy of its policy holders was 77 years. They want to know if their clients this year have a longer life expectancy, on average, so the company randomly samples some of the recently paid policies to see if the mean life expectancy of policy holders has increased. The insurance company will only change their premium...
(7) An actuary for an insurance company created the following probability table for a certain home...
(7) An actuary for an insurance company created the following probability table for a certain home insurance policy for a home in Drachtown, USA (which is a very depressing place). Event Payout to Policy Holder. Probability No claim $0 0.8855 Minor claim $4,500 0.0905 Medium claim $16,800 0.0142 Major Claim $70,500 0.0098 (a) Presuming years are independent, determine the probability that over the course of 12 years, the policy holder is paid some money at least once. Show calculation. (b)...
An insurance company discovered that three policy-holders out of every 1,000 insured against a particular kind...
An insurance company discovered that three policy-holders out of every 1,000 insured against a particular kind of accident file a claim every year. Suppose that the company has 2,000 persons who are insured against that kind of accident. Find the probability that (a) during a given year at least four will file the claim (b) no more than 10 will file the claim (c) between five to eight (inclusive) will file the claim (d) fewer than two will file the...
Insurance Companies track life expectancy information to assist in determing the cost of life insurance policies....
Insurance Companies track life expectancy information to assist in determing the cost of life insurance policies. Last year the average life expectancy of all policy holders was 77 years. ABI Insurance wants to determine if their clients now have a longer life expectancy, on average, so they randomly sample some of their recently paid policies. The ages of the clients in the sample are shown below. 86 75 83 84 81 77 78 79 79 81 76 85 70 76...
Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its...
Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO naming Edible Chemicals as beneficiary. The annual premiums are $77,000 and are payable at the beginning of each year. The cash surrender value of the policy was $24,500 at the beginning of 2018 Required: 1. & 2. Prepare the appropriat 2018 journal entres to record Insurance expense and the increase in the investment assuming the cash surrender value of the policy increased according...
A man wishes to purchase a life insurance policy that will pay the beneficiary $15,000 in...
A man wishes to purchase a life insurance policy that will pay the beneficiary $15,000 in the event that the man's death occurs during the next year. Using life insurance tables, he determines that the probability that he will live another year is 0.97. What is the minimum amount that he can expect to pay for his premium? Hint: The minimum premium occurs when the insurance company's expected profit is zero.
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum of money upon the death of the policy holder. These policies have premiums that must be paid annually. Suppose a life insurance company sells a $230,000 one year term life insurance policy to a 49-year-old female for $527. According to the National Vital Statistics Report, Vol. 47, No. 28, the probability the female will survive the year is 0.99791. Compute the expected value of...
(7) An actuary for an insurance company created the following probability table for a certain home insurance policy for a home in Drachtown, USA (which is a very depressing place). Event Payout to Policy Holder. Probability No claim $0 0.8855 Minor claim $4,500 0.0905 Medium claim $16,800 0.0142 Major Claim $70,500 0.0098 (a) Presuming years are independent, determine the probability that over the course of 12 years, the policy holder is paid some money at least once. Show calculation. (b)...
Edible Chemicals Corporation owns a $4 million whole life insurance policy on the life of its CEO naming Edible Chemicals as beneficiary. The annual premiums are $77,000 and are payable at the beginning of each year. The cash surrender value of the policy was $24,500 at the beginning of 2018 Required: 1. & 2. Prepare the appropriat 2018 journal entres to record Insurance expense and the increase in the investment assuming the cash surrender value of the policy increased according...
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