Consider the Following to Answer the Question(s) Below

question 36

Short Answer

Consider the following to answer the question(s) below:
Insurance companies track life expectancy information to assist in determining the cost of life insurance policies. Last year the average life expectancy of all policyholders was 77 years. ABI Insurance wants to determine if their clients now have a longer life expectancy, on average, so they randomly sample some of their recently paid policies. The insurance company will only change their premium structure if there is evidence that people who buy their policies are living longer than before. The sample has a mean of 78.6 years and a standard deviation of 4.48 years.

-For more accurate cost determination, ABI Insurance wants to estimate the average life expectancy to within one year with 95% confidence. How many randomly selected recently paid policies would they need to sample?

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Definitions:

Lost Profits

Lost profits are potential earnings that a business did not realize due to certain events, disruptions, or decisions that impacted its operations negatively.

Wage Income

The earnings received by individuals for their labor or services, typically calculated on an hourly, daily, or monthly basis.

Back-To-Work Order

A directive requiring employees who may have been on strike or not working due to other reasons to return to their duties.

Union Preference

The inclination or preference of workers or employers for unionized employment settings, often for reasons related to collective bargaining and workers' rights.