Answer the question.
-In order to determine premiums, life insurance companies must compute the probable date of Death. They have determined that Carl LaFong, age 33, is expected to live another 45.7 years. Does This mean that Carl will live until he is 78.7 years old? If not, what does it mean?
A) No, it means that Carl will live to be 78.7 years old, give or take a week.
B) Yes.
C) No, it means that for a large group of persons with the same risk factors as Carl, the average age at death would be approximately 78.7 years old.
D) No, it means that for a large group of persons with the same risk factors as Carl, at least one person would live to an age of exactly 78.7 years old.

Question

Answer the question.
-In order to determine premiums, life insurance companies must compute the probable date of Death. They have determined that Carl LaFong, age 33, is expected to live another 45.7 years. Does This mean that Carl will live until he is 78.7 years old? If not, what does it mean?
A) No, it means that Carl will live to be 78.7 years old, give or take a week.
B) Yes.
C) No, it means that for a large group of persons with the same risk factors as Carl, the average age at death would be approximately 78.7 years old.
D) No, it means that for a large group of persons with the same risk factors as Carl, at least one person would live to an age of exactly 78.7 years old.

Quizplus · Accepted Answer

The correct answer is C because life insurance companies use statistical averages to predict life expectancy. The figure of 45.7 additional years does not guarantee that Carl will live to be exactly 78.7 years old, but rather indicates that, on average, individuals with similar profiles to Carl's are expected to live to around that age.

Answer the Question. -In Order to Determine Premiums, Life Insurance Companies Must Compute