Question: Question 1 Historical data from last year indicate that 89,750 of 5,483,500 policyholders made claims on their home fire insurance policies. If the claim payment

Question 1

Historical data from last year indicate that 89,750 of 5,483,500 policyholders made claims on their home fire insurance policies. If the claim payment per policy is

$120,000, and the rate of return earned on the insurance companys investments is 5%, what should be the premium of the policy?

Question 2

A male customer of 35 years old wants to purchase a two-year term life insurance policy from your insurance company Nova Life. Premium will be received at beginning of each year, and a claim of $80,000 would be paid in the middle of the year if ever death occurs. With an annual interest rate of 6%, and using the Nova Scotia Life Table, what minimum premium will you charge on the policy?

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