Question

What is a return of premium (ROP) term life insurance policy? Explain how a ROP policy works in relation to a regular term life insurance.

Answer #1

1. An insurance company sells a $90,000 one-year term life
insurance policy for a premium of $458. Find the expected value to
the company of a single policy if 99.53% of the insured people
survive one year.
A. $35
B. $55
C. $458
D. $89,542
2. 47% of all people in a community favor the development of a
mass transit system, while only 18% of the people in that community
both favor it and do not own a car. If...

1.A man purchased a $21,000, 1-year term-life insurance policy
for $350. Assuming that the probability that he will live for
another year is 0.985, find the company's expected net gain.
2.A man wishes to purchase a life insurance policy that will pay
the beneficiary $20,000 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 0.95. What
is the minimum amount that...

A $200,000 life insurance term policy costs $150 for 5 years of
coverage for a 30 year old male. If the male dies during those 5
years, the insurance company pays their family $200,000. If he
survives those 5 years, the insurance company will have collected
the $150 premium. The insurance company knows a 30 year old has a
0.000176 probability of dying over 5 years. What is the expected
profit for the insurance company on this policy?

An insurance company sells a $12,000, five-year term life
insurance policy to an individual for $640. Find the expected
return for the company if the probability the individual will live
for the next five years is 0.98. (Round your answer to the nearest
cent.)

An insurance company offers a $120,000 term life policy lasting
2 years to a man of average health aged 50. To value the policy,
the company has four conditions: (1) the yearly interest or
discount rate is 4%, (2) the compounding or discounting is done
every 6 months, (3) the premium is made once at the start of a
year, and (4) the payout occurs at the end of a
year. What is the company’s break-even yearly premium?

A customer buys a $250,000 life insurance policy with an annual
premium of $600. Her probability of dying during the year is 0.002.
If she dies, the insurance company will have to give her
beneficiary $250,000.
Calculate the insurance company’s expected value for this
policy. And what does the expected value represent?

Suppose a life insurance company sells a $190,000 one-year
term life insurance policy to a 20-year-old female for $330. The
probability that the female survives the year is 0.999502. Compute
and interpret the expected value of this policy to the insurance
company.

Sonja, age 25, recently purchased a $100,000 ordinary
life insurance policy on her life. The waiver-of-premium
rider and guaranteed purchase option are attached to
the policy. For each of the following situations, indicate
the extent of the insurer’s obligation, if any, to Sonja
or to Sonja’s beneficiary. Identify the appropriate policy
provision or rider that applies in each case. Treat each
event separately.
a. Sonja fails to pay the second annual premium due
on January 1. She dies 15 days...

And
insurance company sales a one year term life insurance policy to an
80-year-old woman. The woman pays a premium of $1000. If she dies
within one year the company will pay $20,000 to her beneficiary.
According to the US centers for disease control and prevention the
probability that a 80-year-old woman will be a live one year later
is 0.9516. But X be the profit made by the insurance company. Found
the probability distribution in the ass but the...

a 30 -year old woman purchases a $200,000 term life insurance
policy for an annual payment of $460. Based on a period life table
for the U.S. Government, the probability that she will survive the
year is 0.999051. Find the expected value of the policy for the
insurance company. Round to two decimal places for currency
problems.

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 3 minutes ago

asked 6 minutes ago

asked 32 minutes ago

asked 32 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago