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James has opted for a 20-payment life insurance policy of $200,000 related questions

  • 1James has opted for a 20-payment life insurance policy of $200,000

    James has opted for a 20-payment life insurance policy of $200,000. James is 42 years old. What is his annual premium?

  • 2n insurance company wants to offer a new 5-year, level-term life insurance policy to recent college graduates

    n insurance company wants to offer a new 5-year, level-term life insurance policy to recent college graduates. The policy will have a face value (the amount paid in case of death) of $50,000. Normally, the company charges different premiums depending on the age, gender, tobacco habits and health of the person to be insured*. However, for this simple policy, the company plans to charge a flat $60/year for every eligible customer, and avoid the underwriting costs normally associated with new policies. It costs the company an average of $30 per policy for advertising, sales and administration. In order to estimate the profitability of the new policy, you have been asked to simulate expected policy income (premium payments received) compared to costs (administrative/sale cost plus the occasional death benefit) for an anticipated 100,000 policies. Background Information: In each of the 5 policy years, there are 3 possible outcomes. • The insured may die, and $50,000 will be paid out (there is a 0.1% chance of death in any one year for persons in this age group) • The insured may decide to drop the policy, with no payout, and all premiums paid so far are forfeited – (there is a 4% chance of this happening during any year) • The insured may continue to pay the annual premium and the policy remains in force. At the end of the fifth year, the insurance terminates, with no further costs to either party. Use a Monte Carlo simulation to solve this problem. Rather than a closed-form solution, Monte Carlo techniques depend on setting up the problem parameters and then inputting a series of random values. The combination of all the random solutions is taken as the problem solution. Hints: Set up the calculations for cash flow each year based on the costs and probabilities given above. Then, the actual cash flow for each policy (each simulation) depends on random numbers which determine which of the possible events actually occurs for that policy holder during that year. Sum the company’s total expected income for all the policies sold, compare this to the cost of selling the policies, and determine how profitable this will be for the company. (You can ignore the cost of money and treat all income as the same, no matter what year it happens.) To generate random numbers, use the rand() function found in . It does not take any arguments, and it returns an integer between 0 and RAND_MAX (a constant already defined in the stdlib header). You will want to initialize, or “seed”, the random number function once, at the beginning of your program, by calling srand(time(NULL)). To use the time() function you must also include . Test your program for small numbers of random inputs, and hand-verify proper operation before you scale it up to the full 100,000 policies. Run the program multiple times and observe any differences in the results. If there are differences, what do you think caused them and what does that mean for your analysis?

  • 3n insurance company wants to offer a new 5-year, level-term life insurance policy to recent college graduates

    n insurance company wants to offer a new 5-year, level-term life insurance policy to recent college graduates. The policy will have a face value (the amount paid in case of death) of $50,000. Normally, the company charges different premiums depending on the age, gender, tobacco habits and health of the person to be insured*. However, for this simple policy, the company plans to charge a flat $60/year for every eligible customer, and avoid the underwriting costs normally associated with new policies. It costs the company an average of $30 per policy for advertising, sales and administration. In order to estimate the profitability of the new policy, you have been asked to simulate expected policy income (premium payments received) compared to costs (administrative/sale cost plus the occasional death benefit) for an anticipated 100,000 policies.Background Information:In each of the 5 policy years, there are 3 possible outcomes.• The insured may die, and $50,000 will be paid out (there is a 0.1% chance of death in any one year for persons in this age group)• The insured may decide to drop the policy, with no payout, and all premiums paid so far are forfeited – (there is a 4% chance of this happening during any year)• The insured may continue to pay the annual premium and the policy remains in force. At the end of the fifth year, the insurance terminates, with no further costs to either party.Use a Monte Carlo simulation to solve this problem. Rather than a closed-form solution, Monte Carlo techniques depend on setting up the problem parameters and then inputting a series of random values. The combination of all the random solutions is taken as the problem solution.Hints:Set up the calculations for cash flow each year based on the costs and probabilities given above. Then, the actual cash flow for each policy (each simulation) depends on random numbers which determine which of the possible events actually occurs for that policy holder during that year. Sum the company’s total expected income for all the policies sold, compare this to the cost of selling the policies, and determine how profitable this will be for the company. (You can ignore the cost of money and treat all income as the same, no matter what year it happens.)To generate random numbers, use the rand() function found in . It does not take any arguments, and it returns an integer between 0 and RAND_MAX (a constant already defined in the stdlib header). You will want to initialize, or “seed”, the random number function once, at the beginning of your program, by calling srand(time(NULL)). To use the time() function you must also include . Test your program for small numbers of random inputs, and hand-verify proper operation before you scale it up to the full 100,000 policies. Run the program multiple times and observe any differences in the results. If there are differences, what do you think caused them and what does that mean for your analysis?

  • 4Joe Steam may elect to take a lump-sum payment of $50,000 from his insurance policy or an annuity of $5,650 annually as long as he lives

    Mr. Joe Steam may elect to take a lump-sum payment of $50,000 from his insurance policy or an annuity of $5,650 annually as long as he lives. How long must Mr. Steam anticipate living for the annuity to be preferable to the lump sum if his opportunity rate is 8 percent?

  • 5An insurance company charges a 20-year old male a premium of $250 for a one year $100,000 life insurance policy

    An insurance company charges a 20-year old male a premium of $250 for a one year $100,000 life insurance policy. A 20 year old male has a .9985 probability of living for a year. i.)draw the probability distribution table that illustrates the probability of living or dying in one year ii.)what is the expected value in dollars? iii.)find the standard deviation

  • 6formula for combination term and whole life insurance policy

    We are being asked to come up with a formula for a combinationwhole life and term insurance policy that will insuarance thecheapest premium for $1000 worth ofinsurance over 40 years. Anyone out there no where to look to help me?

  • 7Last year the annual premium on a certain hospitalization insurance policy was $408, and the policy paid 80 percent of any hospital expenses incurred

    Last year the annual premium on a certain hospitalization insurance policy was $408, and the policy paid 80 percent of any hospital expenses incurred. If the amount paid by the insurance policy last year was equal to the annual premium plus the amount of hospital expenses not paid by the policy, what was the total amount of hospital expenses last year? (A) $850.00 (B) $680.00 (C) $640.00 (D) $510.00 (E) $326.40

  • 8Last year the annual premium on a certain hospitalization insurance policy was $408, and the policy paid 80 percent of any hospital expenses incurred

    Last year the annual premium on a certain hospitalization insurance policy was $408, and the policy paid 80 percent of any hospital expenses incurred. If the amount paid by the insurance policy last year was equal to the annual premium plus the amount of hospital expenses not paid by the policy, what was the total amount of hospital expenses last year? please help me I have tried hard for this problem but in vain. I'll be thankful to you

  • 9insurance matrix, Insurance MatrixType of Insurance Functions Example of Company Coverage CharacteristicsAuto Home Health Disability Life what do they mean by the functions

    insurance matrix, Insurance MatrixType of Insurance Functions Example of Company Coverage CharacteristicsAuto Home Health Disability Life what do they mean by the functions

  • 10Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $110,000

    Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $110,000. This distribution follows the normal distribution with a standard deviation of $40,000. a. If we select a random sample of 50 households, what is the standard error of the mean? 5,656 b. What is the expected shape of the distribution of the sample mean? c. What is the likelihood of selecting a sample with a mean of at least $112,000? d. What is the likelihood of selecting a sample with a mean of more than $100,000? e. Find the likelihood of selecting a sample with a mean of more than $100,000 but less than $112,000.

  • 11True Or False Questions:The term insurance has no value as an investment and is the least expensive type of life insurance

    True Or False Questions:The term insurance has no value as an investment and is the least expensive type of life insurance.Liability insurance protects a homeowner against injury to other people on his property.After these my math is done. Someone please help me. Thank You.

  • 12dividend payment policy

    A corporation has been paying out 1 million per year in dividends for the past several years. This year, the company wants to pay the 1 million dollar dividend butcant. All of the following are reasons the company cannot continue its dividend policy EXCEPT:A)the company's cash balance is less than 1 millionB)the company's liabilities exceed its assetsC)the company's net income this year is less than 1 millionD)the company's retained earnings balance at year end is less than one million