ch01 - Chapter 1 Introduction to life insurance ACTSC 232...

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Chapter 1. Introduction to life insurance ACTSC 232 — Introduction to Actuarial Mathematics Department of Statistics and Actuarial Science University of Waterloo Fall 2011 Instructor: Chengguo Weng C. Weng ([email protected]) – p. 1/9
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Life insurance Def: A contract between the insurance buyer and an insurer (insurance company), where the insurer agrees to pay certain amount of benefits upon the occurrence of an individual’s or some individuals’ death or survival. In return, the buyer agrees to pay a stipulated amount of money to the insurer. XBox Policy: such a contract is also called a policy. XBox Policyholder: the buyer. XBox Insured: the person whose life status is used to determine whether the benefits should be paid or not; often coincide with the policyholder (we assume it is the case throughout the course). XBox Beneficiary: the person who receive the insurance benefits. XBox Sum insured: the predetermined lump sum, delivered to the beneficiary upon the occurrence of the death or survival stipulated in the insurance policy. XBox Premiums: the amount of money paid by the buyer (policyholder) to the insurer is called the premiums; paid at regular intervals or in a lump sum. C. Weng ([email protected]) – p. 2/9
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Life insurance:premiums Single premium insurance policies XBox The buyer makes a single payment to the insurer. Regular premium insurance policies XBox The policyholder pays at regular intervals, e.g. annually, monthly, etc.
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