Page 231 - Probability Demystified

220 CHAPTER 12 Actuarial Science

7. How much will a healthy 40-year-old female pay for a $100,000,
20-year term policy if she lives to age 60?
a. $3920
b. $5880
c. $6040
d. $2480

8. If a life insurance company writes 100 males age 21 a $30,000, 20-year
term policy, how much will it pay out in 20 years?

a. $90,000
b. $120,000
c. $60,000
d. $150,000

9. The median future lifetime of a 51-year-old male is
a. 15 years
b. 32 years
c. 30 years
d. 28 years
10. The median future lifetime of a 63-year-old female is

a. 27 years
b. 21 years
c. 19 years
d. 30 years

Probability Sidelight

EARLY HISTORY OF MORTALITY TABLES

Surveys and censuses have been around for a long time. Early rulers wanted
to keep track of the economic wealth and manpower of their subjects. One
of the earliest enumeration records appears in the Bible in the Book of
Numbers. Egyptian and Roman rulers were noted for their surveys and
censuses.
In the late 1500s and early 1600s, parish clerks of the Church of England in
London began keeping records of the births, deaths, marriages, and baptisms
of their parishioners. Many of these were published weekly and summarized
yearly. They were called the Bills of Mortality. Some even included possible