A life insurance company sells whole-life assurance policies with a sum assured of $20,000, payable at the end of the year of death. A life aged 50 exact has just committed to purchase a policy (first premium not paid yet). The premium is $420 payable annually in advance until the death of the policyholder. a) Find the expected present value of the future loss to the company arising from this policy. b) Show that the variance of the present value of the future loss from this policy can be expressed as ?. ?50 ′ + ?. Determine the numerical values of ? and ?, and the rate of interest used to evaluate ?50 ′ . Basis: mortality AM92 Ultimate, interest 4% pa. Ignore expenses.
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
A life insurance company sells whole-life assurance policies with a sum assured of $20,000, payable at the end of the year of death. A life aged 50 exact has just committed to purchase a policy (first premium not paid yet). The premium is $420 payable annually in advance until the death of the policyholder.
a) Find the
b) Show that the variance of the present value of the future loss from this policy can be expressed as ?. ?50 ′ + ?. Determine the numerical values of ? and ?, and the rate of interest used to evaluate ?50 ′ . Basis: mortality AM92 Ultimate, interest 4% pa. Ignore expenses.
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