SOA Exam P Sample Question 255
Study guide: Exam P-1
A dental insurance company pays 100% of the cost of fillings and 70% of the cost of root canals. Fillings and root canals cost 50 and 500 each, respectively.
The tables below show the probability distributions of the annual number of fillings and annual number of root canals for each of the company’s policyholders.
| # of Fillings | 0 | 1 | 2 | 3 |
|---|---|---|---|---|
| Probability | 0.60 | 0.20 | 0.15 | 0.05 |
| # of Root Canals | 0 | 1 |
|---|---|---|
| Probability | 0.80 | 0.20 |
Calculate the expected annual payment per policyholder for fillings and root canals.
- A) 90.00
- B) 102.50
- C) 132.50
- D) 250.00
- E) 400.00
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