For a new life insurance product, the Nordlight Insurance Company set the following annual premium rates for each riskclass$1.80 per $1,000 of coverage for preferred risks$3.20 per $1,000 of coverage for standard risks$4.00 per $1,000 of coverage for substandard risksHolly Elana has applied for $100,000 of coverage under this new product. Ms. Elana is a proposed insured who representsan average level of risk. This information indicates that Ms. Elana's annual premium amount will be$180$300$320

Ms. Elana represents an average level of risk, which typically falls under the "standard risks"…

Answered: For a new life insurance product, the…

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter8: Insuring Your Life

Section: Chapter Questions

Problem 6FPE

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Similar questions

An insurance company has a simplified method for determining the annual premium for a term life insurance policy. A flat annual fee of $150 is charged for all policies plus $2.50 for each thousand dollars of the amount of the policy.For example, a $20,000 policy would cost $150 for the fixed fee plus $50, which corresponds to the face value of the policy. If p equals the annual premium in dollars and x equals the face value of the policy (stated in thousands of dollars), determine the function which can be used to compute annual premiums.
Calculate the annual premium for the following policy. (Use Table 20.1.) Amount of coverage (face value of policy) Age and sex of insured Type of insurance policy Annual premium $200,000 42 (M) 20-payment life
An insurer issues a portfolio of identical 20-year term insurance policies to independent lives aged 60. The sum assured for each policy is $50,000 payable at the end of the year of death. The mortality of the portfolio follows the Standard Ultimate Life Table and the effective interest rate is 5% per annum. Assume the same mortality applies to each life in the portfolio. 10 000 identical policies are issued. calculate the present value of the loss on the whole portfolio.PLEASE ANSWER ASAP
A fully discrete life insurance policy is issued to (30). The death benefit is 1000 plus the benefit reserve at the end of the year of death. The net level premium is 150, and the reserve at the end of the second policy year is 117.875. Given that q30 = q31 = .1, determine the effective interest rate i.
Calculate the annual premium for the following policy. (Use Table 20.1.) Amount of coverage (face value of policy) 200,000 Age and sex of insured 42 M Type of insurance policy 20-payment life Annual premium
You are given: - Premiums are calculated using the equivalence principle. - Mortality follows the Illustrative Life Table. - i = 0.06 Calculate the annual benefit premium for a 30-year fully discrete term insurance on (35) with 15 annual premium payments having a level death benefit of 1000.
A life insurance company issues a whole life annuity immediate with annual payments. The annuity is issued to (65). The annuity pays 50,000 at the end of each year for the life of the annuitant with the first payment being made at age 66. You are given: A single premium is paid to purchase this annuity. Mortality follows the Illustrative Life Table with i = 0.06. Assume that the single net premium, P, is 110% of the expected present value at issue of benefits. Calculate the probability that this policy will generate a profit using P.
For a special fully discrete 3-year term insurance on (45), whose mor- tality follows a double decrement model: (i) Decrement 1 is accidental death; decrement 2 is all other causes of death. (ii) 45 2500 4 10 46 2486 15 47 2466 20 (ii) i = 0.06 (iv) The death benefit is 200,000 for accidental deaths and 100,000 for all other causes. Calculate the annual net premium (paid at the beginning of each year) and the net premium reserve at the end of year 1 and 2.
In 2020, the two bend points for computing Social Security’s Primary Insurance Amount (PIA) are $960 and $5,785. This means that in 2020, the benefit formula works in the following way: PIA is given by 90% of the first $960 of AIME, plus 32% of the amount above $960 until $5,785, plus 15% of the amount above $5,785. Suppose that after a long and successful career, somebody has reached the full benefits age and has average indexed monthly earnings of $5,000. What is their Primary Insurance Amount? $1,292.80 $1,600.00 $2,156.80 $2,464.00 $2,515,25
Calculate the annual premium for the following policy. (Use Table 20.1.) (for females subtract 3 years from the table.) Note: Round your answer to the nearest cent. Amount of coverage (face value of policy) 54,000 Age and sex of insured 42 M Type of insurance policy 5-year term Annual premium
Using Table 19-1 and Table 19-2, calculate the annual, semiannual, quarterly, and monthly premiums (in $) for the life insurance policy. Round your answers to the nearest cent. Face Valueof Policy Sex and Ageof Insured Type of Policy AnnualPremium SemiannualPremium QuarterlyPremium MonthlyPremium $70,000 male—40 whole life $ $ $ $
St. Joseph's Hospital began operations In December 2019 and had patlent service revenues totaling $1,230,000 (based on customary rates) for the month. Of this, $138,.000 is billed to patlents, representing their Insurance deductibles and copayments. The balance is billed to third-party payors, Including Insurance companles and govemment health care agencies. St. Joseph's estimates that 20 percent of these third-party payor charges wll be deducted by contractual adjustment. The hospital's fiscal year ends on December 31. Required: 1. Prepare the Journal entries for December 2019. Assume 15 percent of the amounts billed to patlents will be reduced through Implicit price adjustments. 2 Prepare the Journal entries for 2020 assuming the following: a. $18.000 is collected from the patients during the year and $1,300 of price adjustments are granted to individuals. b. Actual contractual adjustments total $306,000. The remalning recelvable from third-party payors Is collected. (If no entry Is…

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