Final answer:
A Single Pay Whole Life policy provides coverage until death, beyond any specific age, as long as the cash value is not exhausted. Premiums for life insurance can be influenced by actuarial calculations of risk, including factors like family history of cancer.
Step-by-step explanation:
A Single Pay Whole Life insurance contract provides coverage until the death of the insured, regardless of the age they reach. This means that the correct answer is not A. 90, B. 95, nor C. 100, but rather coverage continues regardless of the insured's age as long as the policy is in force and the cash value has not been exhausted. Whole life policies do have a cash value component which can be used by the policyholder, but the primary feature of the policy is the death benefit that is paid to beneficiaries upon the passing of the insured.
To answer the different scenarios regarding actuarially fair premiums for life insurance based on risk factors such as family history of cancer:
- For the group of men with a family history of cancer, the actuarially fair premium would be higher due to their increased risk.
- For the entire group without knowing family history, the average risk would be considered for calculating premiums.
- If the insurance company charged the actuarially fair premium to the entire group, it may lose money if more high-risk individuals claim than expected.