Suppose that a life insurance company insures 1 million 50-year-old people in a given year. (Assume a death rate of 5 per 1000 people.) The cost of the premium is $200 per year, and the death benefit is $50,000 What is the expected profit or loss for the insurance company?
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.
Suppose that a life insurance company insures 1 million 50-year-old people in a given year. (Assume a death rate of 5 per 1000 people.) The cost of the premium is $200 per year, and the death benefit is $50,000 What is the expected profit or loss for the insurance company?
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Life Expectancy
A Table of Contents
One of the most commonly cited vital statistics is life expectancy, which is often used to compare
Q 7d
overall health at different times or in different countries. The idea will be clearer if we start by looking at
death rates. Figure 7.14a O shows the U.S. death rate (deaths per 1000 people) for people of different
ages. Note that there is an elevated risk of death shortly after birth, after which the death rate drops to
Unit 7D Assessing Risk
very low levels. At about 15 years of age, the death rate begins a gradual rise.
Quick Quiz 7D
Figure 7.14
U.S. Death Rate by Age (0 to 80)
U.S. Life Expectancy by Age (0 to 100)
Exercises 7D
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Unit 7D Quick Quiz
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(a) The U.S. death rate for different ages. (b) Life expectancy for different ages.
Source: Centers for Disease Control and Prevention (2012 data, released 2016).
Figure 7.14b O shows the life expectancy D of Americans (men and women combined) of different
ages, defined as the number of additional years a person of a given age can expect to live on average.
As we would expect. life expectancv is hiaher for vounaer people because. on average. thev have
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Death rate (per 1000)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F22dc9306-0899-4935-84b6-a40df9b9b32c%2F30302589-f567-4850-b262-e0e642702c0d%2Fu729g8hl_processed.png&w=3840&q=75)
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