20. Vincent took out a disability income policy for 70 percent of his income when that income was $6,000 a month. He quit that job and became an actor making $2,000 a month for the past three years. If he became disabled now, which of the following policy provisions is most likely to affect his actual disability benefit? a. integration provision b. relation of earnings to insurance provision c. insurance with other insurers provision d. free look provision
Added by Nieves E.
Close
Step 1
70% of $6,000 = 0.7 * $6,000 = $4,200 Now, Vincent's income has decreased to $2,000 a month. If he becomes disabled now, the policy provision that is most likely to affect his actual disability benefit is the one that takes into account his current income. Show more…
Show all steps
Your feedback will help us improve your experience
Akash M and 59 other Principles of Accounting educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Recommended Videos
Dental Insurance An insurance policy reimburses dental expense, $X,$ up to a maximum benefit of $250 .$ The probability density function for $X$ is $$f(x)=\left\{\begin{array}{ll}{c e^{-0.004 x}} & {\text { for } x \geq 0} \\ {0} & {\text { otherwise,}}\end{array}\right.$$ where $c$ is a constant. Calculate the median benefit for this policy. Choose one of the following. (Hint: As long as the expenses are less than $250,$ the expenses and the benefit are equal.) Source: Society of Actuaries. $\begin{array}{lll}{\text { (a) } 161} & {\text { (b) } 165}\end{array}$ $\begin{array}{llll}{\text { (c) } 173} & {\text { (d) } 182} & {\text { (e) } 250}\end{array}$
Probability and Calculus
Expected Value and Variance of Continuous Random Variables
Insurance Reimbursement An insurance policy reimburses a loss up to a benefit limit of $10 .$ The policyholder's loss, $Y$ follows a distribution with density function: $$ f(y)=\left\{\begin{array}{ll}{\frac{2}{y^{3}}} & {\text { for } y>1} \\ {0} & {\text { otherwise }}\end{array}\right. $$ What is the expected value of the benefit paid under the insurance policy? Choose one of the following. (Hint: The benefit paid will be equal to the actual loss if the actual loss is less than the limit. Otherwise it will equal the limit.) Source: Society of Actuaries. $\begin{array}{llllll}{\text { a. } 1.0} & {\text { b. } 1.3} & {\text { c. } 1.8} & {\text { d. } 1.9} & {\text { e. } 2.0}\end{array}$
Benefits: Fifty-six percent of all American workers have a workplace retirement plan, 68% have health insurance, and 49% have both benefits. We select a worker at random. a) What's the probability he has neither employer-sponsored health insurance nor a retirement plan? b) What's the probability he has health insurance if he has a retirement plan? c) Are having health insurance and a retirement plan independent events? Explain. d) Are having these two benefits mutually exclusive? Explain.
Qudsiya A.
Recommended Textbooks
Horngren’s Cost Accounting
Cost Accounting A Managerial Emphasis
Principles of Accounting Volume 1: Financial Accounting
Transcript
Watch the video solution with this free unlock.
EMAIL
PASSWORD