MTHEL131 Chapter Notes - Chapter 1: Actuary, Externality, Ilfeld
13 Jun 2014
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Document Summary
Economic security and the nature of life and health. Economic security and nature of life and health insurance. Groups can provide security where lone individual would face insecurity (risk sharing = mennonites) Coverage continues (if premium are paid) for whole of life. Coverage ceases at end of n years so benefit is paid only if death occurs in n year period. N year endowment if policyholder dies in n year period value of policy is paid out to beneficiary. If policyholder lives for n year, value of policy is paid to policyholder. Insurance does not stop these or change their probability, but change small probability for large loss to certainty of small cost (premium) Life annuities pay periodic (monthly) payment to policyholder(annuitant) starting at specified age and going for life. Can also pay term certain annuities (10 year annuity) or combination. Disability income insurance (policyholder disabled physical or mental and can"t work)
