Suppose an insurance company offers a contract with an annual premium that is equal to what...

Suppose an insurance company offers a contract with an annual premium that is equal to what the company expects to pay out to their customers for the year. This type of contract is called:

Question 16 options:

	full insurance
	partial insurance
	actuarially fair
	actuarially unfair

Expert Solution

It's called actuarially fair because premiums paid are equal to expected value of compensation recieved

Rahul Sunny answered 2 years ago

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