The net single premium for a life insurance policy is
A) the premium the insurer charges to cover the death benefit and the insurer's expenses.
B) the future value of the future death benefit.
C) the present value of the future death benefit.
D) the face value of the policy discounted back for the number of year the policy will be in force.
Question 2
According the 2001 CSO mortality table, the yearly probability of dying for a 40 year-old man is .00165. The present value of 1 one year from today, assuming a 5.5 percent interest rate, is .9479.
What is the net single premium per 1,000 for a one-year term insurance policy sold to a man at age 40 assuming a 5.5 percent interest rate? Assume the premium is paid at the start of the year and the death benefit is paid at the end of the year.
A) 1.56
B) 2.45
C) 7.18
D) 952.81
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