SOA Exam FAM Sample Question 29
Study guide: Exam FAM
For a stop-loss insurance on a three person group:
(i) Loss amounts are independent.
(ii) The distribution of loss amount for each person is:
| Loss Amount | Probability |
|---|---|
| 0 | 0.4 |
| 1 | 0.3 |
| 2 | 0.2 |
| 3 | 0.1 |
(iii) The stop-loss insurance has a deductible of 1 for the group.
Calculate the net stop-loss premium.
- A) 2.00
- B) 2.03
- C) 2.06
- D) 2.09
- E) 2.12
Answer this question and see the worked solution