Key advantage and disadvantage of this type of system

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1.a.In the insurance industry, what is the specific purpose of policy reserves?

b. Please discuss the three premises on which the legal reserve system is based.

c. Are policy reserves assets, liabilities, or equity? Please explain.

2. Assume the following information: Michael Reyes loaned $1,000 to his sister, Anna Smith. Mr. Reyes charged his sister a 10 percent interest rate, compounded annually. At the end of 5 years, Ms.Smith wanted to pay back the entire loan plus the total interest accrued on the loan. This information indicates that Ms. Smith should pay Mr. Reyes a total of ___ at the end of 5 years. Please show your calculations or your calculator steps.

3.Using the table provided in the text in Figure 4.1 (or if you use a mortality from a different source, providea copy of the table you use), what is the mortality rate of a mal age 60 dying?

4. The annual premium rate for a $500,000 life insurance policy is expressed as $4 per $1,000 of coverage. The annual premium amount for this policy is______________.

5.

a. Briefly discuss the concept of level premiums in life insurance.

b. What is the key advantage and disadvantage of this type of system?

Attachment:- chapter444420420financial20design.zip

Reference no: EM13973189

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