Case of breakeven for actuarial risk

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Question

An insurance company requires an overhead on the premiums it collects from its customers. If the payment to a beneficiary is $100,000 and it collects $1,000 per year in premiums, what is the probability of death in the year that the insurance company used to calculate the collected premium if the overhead charge is 10 percent?

Compare the result to the case of breakeven for the actuarial risk.

Reference no: EM133239564

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