Life Insurance Industry in US
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Revision as of 08:11, 2 May 2009 by Lakshmikantg (Talk | contribs)
Objective
- To perform sensitivity analysis and qualitatively determine the variation in monthly premium charged by the life insurance companies.
- To understand Life Insurance companies behavior towards the consumers of different gender and belonging to different health groups.
Assumptions
- Height and Weight for men and women is taken as the median height and weight prevailing in USA.
- Coverage Amount is based on the median annual household income of USA taken as $50,000 and Term duration is assumed as 15 years.
Overview of Life Insurance
Introduction
- Life Insurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the insured individual's or individuals' death or other event, such as terminal illness or critical illness.
- In return, the policy owner agrees to pay a stipulated amount called a premium at regular intervals or in lump sums.
- To be a life policy the insured event must be based upon the lives of the people named in the policy.
- Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the contract to limit the liability of the insurer; for example claims relating to suicide, fraud, war, riot and civil commotion.
