Explain why there is a savings element to a whole life insurance contract
What will be an ideal response?
The savings element results from the insurers trying to overcome the problems of self-selection and affordability in the later years of the contract. To provide affordable insurance and minimize self-selection, the premium is leveled. In the early years of the contract the premium overpays the mortality expense and in the later years, mortality is underpaid. The overpayment, interest and survivor benefit provide the cash value in the contract.
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Strait Company has outstanding shares as follows: common stock, no par, 16,000 shares and preferred stock, par $10, 5,000 shares. The number of shares that should be used in the denominator to compute earnings per share should be
A. 5,000. B. 16,000. C. 18,000. D. 21,000. E. 50,000.
A decision table is sometimes called a payout table
Indicate whether the statement is true or false