Final answer:
A per capita distribution of life insurance policy proceeds is payable to the named living primary beneficiaries. The actuarially fair premium for a life insurance policy depends on mortality risks and may differ for groups based on health history. Whole life insurance offers a death benefit as well as a cash value which can be used by the policyholder.
Step-by-step explanation:
A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the named living primary beneficiaries. This means that the benefits would be shared equally amongst all living beneficiaries named in the policy. If any beneficiary has predeceased the insured, their share would not be included in the estate but would instead be divided among the surviving named beneficiaries.
When considering life insurance and the determination of premiums, actuaries use statistical methods to calculate actuarially fair premiums based on various risk factors. For example, in a scenario with 50-year-old men with and without a family history of cancer, the premiums would be set differently for each group due to the differing risks of mortality within the next year.
For the group with a 1 in 50 chance of dying, the fair premium would be higher compared to the group with a 1 in 200 chance. In a case where the insurance company does not have information on family cancer history, the actuarially fair premium for the entire group is a blended rate, which could lead to adverse selection if it's not adjusted properly to reflect the risk of the undisclosed high-risk group. Life insurance products like cash-value (whole) life insurance offer both a death benefit and a cash value component, which can accumulate over time and be used by the policyholder for various monetary needs.