There is a 0.0087 probability that a randomly selected 27-year-old male lives through the year. A life insurance company charges $150 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out s00,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 27-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is s. The value corresponding to not surviving the yea i (Type integers or decimals. Do not round.) b. If the 27-year-old male purchases the policy, what is his expected value? The expected value is sO (Round to the nearest cent as needed.) o. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of $ on every 27-year-old male it insures for 1 year. (Round to the nearest cent as needed.)

There is a 0.0087 probability that a randomly selected 27-year-old male lives through the year. A life insurance company charges $150 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out s00,000 as a death benefit. Complete parts (a) through (c) below. a. From the perspective of the 27-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is s. The value corresponding to not surviving the yea i (Type integers or decimals. Do not round.) b. If the 27-year-old male purchases the policy, what is his expected value? The expected value is sO (Round to the nearest cent as needed.) o. Can the insurance company expect to make a profit from many such policies? Why? because the insurance company expects to make an average profit of $ on every 27-year-old male it insures for 1 year. (Round to the nearest cent as needed.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

A 40 year old man in the United States has a 0.199% risk of dying during the next year. An insurance company charges a premium of $429 pays a $166,010 death benefit. What is the expected gain or loss to the man when for a life-insurance policy that purchasing the insurance policy? Hint: Calculate the expected loss of the premium if the man survives (always a negative value), then subtract the premium from the death benefit and calculate the expected gain to the beneficiarles if the man dies (always a positive value), and then add these two numbers to find the net result. A negative net result should be entered as a negative value In the box below. Note: Please avold rounding numbers in the middle of your calculations. However, round your final answer to two decimal places, before entering it in the box below. A negative final answer indicates an expected loss for purchasing the policy.
Assume that you have calculated: (a) premiums for life insurance policies and (b) payments to annuitants based upon an assumption that everybody dies before attaining age 101. Now you discover that a significant number of your policy owners are likely to live beyond age 101 and some will live to age 121. How will that affect your business?
Ms. Asma is aged 40 years. She consulted Oman United Insurance Company to plan for the higher education of her daughter. Therefore, she asked for a straight life policy with a face value of OMR 80,000 with a semi-annually payment basis. How much will Ms. Asma reimbursed Oman United Insurance Company? 10-Year Fixed Rate 20-Year Fixed Rate Straight-Life Age Male Female Male Female Male Female 20 1.21 1.17 1.82 1.76 2.72 2.63 30 1.27 1.23 1.91 1.85 3.49 3.38 40 1.46 1.41 2.20 2.13 4.02 3.88 50 2.41 2.33 3.63 3.51 5.18 5.01 60 4.72 4.56 7.11 6.88 8.21 7.93 O a. OMR 158.304 b. OMR 80.704 C. OMR 27.160 d. OMR 310.4
Evan had three accounts as listed below. In 2020, how much was his total insurance coverage by the FDIC? • Bank A: $110,000 Bank B: $80,000 • Bank C: $315,000 Multiple Choice O $110,000 $190,000 O $315,000
Use Exhibit 14.2 to estimate the average Social Security benefits for a retired couple. Assume that one spouse has a part-time job that pays $28,000 a year, and that this person also receives another $47,000 a year from a company pension. Assume, that the earnings limit was $17,040 per year. Also assume for Social Security benefits the recipients are aged below 67 and will lose $1 in benefits for every $2 they earn above the earnings test amount. Also assume that they would have to pay taxes of 50% on a combined income between $32,000 and $44,000, of their Social Security benefits. If their combined income is more than $44,000, up to 85% of their Social Security benefits is subject to income tax. Round your answer to the nearest dollar.$ __________ Based on current policies, would this couple be liable for any tax on their Social Security income?-Select: YES or NO
9. Social Security payments to Deceased Dependants If the deceased was entitled to $1,100/per month and the widow is 67, how much would the widow be entitled to assuming the family max has not been met? Do Not use $ dollar $ signs in your answer
If you earned $130,000 this year, you would pay more OASDI and Medicare than your partner who earned $75,000. Do you agree or disagree? Please provide calculations to support your answer
Use the given table. Parker's $250,000 whole-life insurance policy has a cash value of $11,286. Parker is 60 years old, female, smokes, and is converting to an extended term policy for the same face value. Use 10-year level term rates to estimate the number of years of extended term insurance she has. Click the icon to view the data table. Parker has years of extended term insurance. (Do not round until the final answer. Then round to two decimal places as needed.)
Mr. Babu Kamil is a married person and have a net income of $85,000 in 2021. His spouse has a net income of $4500 and she has no mental or physical infirmity. Calculate the spousal amount to be claimed in Line 30300 $13808 – 4500 = $9,308 Calculate the spousal credit (how much credit Mr. Babu gets from this amount). $9308*15% = $1396.20
15. In 2013, Wesley purchased an LTCI policy with a maximum benefit amount of $400,000 and a restoration of benefits period of six years. Within a few months of purchasing the policy, he fell victim to a disease that lasted for a year, during which time he received insurance benefit payments totaling $150,000. Since that time, Wesley filed no other claims. Today, what is the total amount of policy benefits available to Wesley under this policy? (Search Chapter 6) o a. $350,000 ob. $400,000 OC. $500,000 o d. No further benefits are available.
Krista and Landor are new parents. They have a two-month-old baby girl and they are considering expanding their family in the future. They have purchased life insurance with a child coverage rider in the amount of $5,000. Unfortunately, their baby girl becomes gravely ill and passes away. How will the insurer deal with their death claim relating to the child coverage rider? Select one: a. b. The insurer will pay the claim for the full amount. The insurer will pay a claim for only half of the full amount to keep the child coverage rider in force for the next child. c. The insurer will deny the claim as Krista and Landon did not purchase accidental death insurance for their
Kim paid her nanny $20,000 during 2021 to watch her three children, Finn (3), Rachel (5) and Caitlyn (7) If Kim's AGI is $126,000, what amount of the dependent care credit would she be able to claim? O a. $7,840 O b. $9,800 c. $16,000 O d. $20,000

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