A ten-year term insurance is be issued to a life aged 50. The sum insured is $200,000 and payable immediately upon death. Premium payments are annual in advance. a) Using the SOA Standard Ultimate Life Table at i = 5% and UDD, compute the net annual premium determined by the equivalence principle. b) Find the probability that this contract makes a profit. c) Compute the gross premium determined by the equivalence principle if the initial expense is $500 plus 10% of the first premium, and if there is a renewal expense of 2% of the annual premium payment for the second and all subsequent premium payments.

A ten-year term insurance is be issued to a life aged 50. The sum insured is $200,000 and payable immediately upon death. Premium payments are annual in advance. a) Using the SOA Standard Ultimate Life Table at i = 5% and UDD, compute the net annual premium determined by the equivalence principle. b) Find the probability that this contract makes a profit. c) Compute the gross premium determined by the equivalence principle if the initial expense is $500 plus 10% of the first premium, and if there is a renewal expense of 2% of the annual premium payment for the second and all subsequent premium payments.

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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