FIL 351 Syllabus
Tuesday, Thursday 12:35-1:50
PM
SFH 369

Life and Health Insurance
Spring 2013
 



Professor Richard MacMinn

Graduate Assistant:  Safdar Ali
        Office: SFH 432A
        E-mail: saali@ilstu.edu
        Office Hours: by appointment


Prerequisites:

FIL 250 is required background.  Basic accounting, finance and statistics are also essential to understanding the principles developed in this course. If you have not had these courses then you should be prepared for extra reading. 


Required Textbook:  

Black and Skipper, Life and Health Insurance (Thirteenth Edition), Prentice Hall

Recommended: Links to additional reading are provided in the schedule of lectures and dropbox.


Course Description:

This course examines life and health insurance markets from the perspective of the buyer and seller. It also includes analysis of group insurance contracts.  Consideration is given to how life and health insurance products fit into the broad framework of financial planning and financial management.


Schedule:

Date Topic Assignment

Tuesday
January 15

Course introduction

 

Thursday
January 17

 

Risk and Choice

 

 

Tuesday
January 22

 

More Risk and Choice

Lab on the risk premium
This class will be in SFH 22E

 

 

Risk premium assignment

Thursday
January 24

 

Lecture on the Economics of Life and Health Insurance
Black & Skipper, Chapter 1, Economic Security and the Economics of Life and Health Insurance

Akerlof, G. A. (1970). "The Market for "Lemons": Quality Uncertainty and the Market Mechanism." Quarterly Journal of Economics 84(3): 488-50

MacMinn, R. (1995). Lecture on ‘The Market for Lemons: Quality Uncertainty and the Market Mechanism’

Shavell, S. (1979). "On Moral Hazard and Insurance." Quarterly Journal of Economics 93(4): 541-562

Hofflander, A. E. (1966). "The Human Life Value: An Historical Perspective." Journal of Risk and Insurance 33(3): 381-391.


 

 

Run-off assignment

 

Tuesday
January 29

 

Briefing on database searches and RefWorks
by Jeff Barr
Milner room 164D

 

 

Thursday
January 31

 

Continuation of
Lecture on the Economics of Life and Health Insurance
Black & Skipper, Chapter 1, Economic Security and the Economics of Life and Health Insurance

Akerlof, G. A. (1970). "The Market for "Lemons": Quality Uncertainty and the Market Mechanism." Quarterly Journal of Economics 84(3): 488-50

MacMinn, R. (1995). Lecture on ‘The Market for Lemons: Quality Uncertainty and the Market Mechanism’

Shavell, S. (1979). "On Moral Hazard and Insurance." Quarterly Journal of Economics 93(4): 541-562

Hofflander, A. E. (1966). "The Human Life Value: An Historical Perspective." Journal of Risk and Insurance 33(3): 381-391.

 

 


 

Tuesday
February 5

 

On the History of Life and Health Insurance
 Black & Skipper, Chapter 3, The History and Importance of Life and Health Insurance

 

 

 

 

 

Thursday
February 7

 

 Lecture on Life and Health Insurance Pricing Fundamentals
Black & Skipper, Chapter 2, Life and Health Insurance Pricing Fundamentals
 

Law of large numbers assignment

Tuesday
February 12

 

Lecture on Term Life and Endowment Insurance
Black & Skipper, Chapter 4, Introduction to Life and Health Insurance Products

Lab on pricing life and endowment insurance
This class will be in SFH 22E

 

 

Thursday
February 14

 

Lecture on Term Life and Endowment Insurance
Black & Skipper, Chapter 4, Introduction to Life and Health Insurance Products

 

 

Pricing assignment

Endowment Pricing assignment

 

Tuesday
February 19
 

Black & Skipper, Chapter 5, Whole Life Insurance Policies
Black & Skipper, Chapter 6, Universal Life Insurance Policies
Speaker: Tom Brokaw

 

Universal life assignment

Thursday
February 21

 

   Swiss Re Presentation on the State of Insurance Industry

Sigma No. 6/2001
Sigma No. 8/2003
Sigma No. 3/2004e
Sigma No. 4 2004e
Sigma No. 2/2005e
Sigma No. 1/2006e
Sigma No. 5/2006e
Sigma No. 2/2010
Sigma No. 2/2011

 

 

 

 

Spanish flu assignment

 

Tuesday
February 26

 

 

 

 

 

 

Thursday
February 28

 

State of the Health Insurance Industry
 

 

 

 

Tuesday
March 5

 

 

Review for Exam One
This class will be in SFH 22E

 

 

Thursday
March 7

Exam One
This exam is in SFH 22E

 

Tuesday
March 12

Spring Break

  

 

Thursday
March 14

 

Tuesday
March 19

 

Notes on life annuities
Black & Skipper, Chapter 8, Annuities and Optional Benefits

Lecture on Life Annuities
Black & Skipper, Chapter 8, Annuities and Optional Benefits

 

 

Life annuity assignment

 

Thursday
March 21

 

 

Life Underwriting
Guest speaker:

A Mortality Based Security
Discuss special topics in mortality risk

State of the Life Insurance Industry
Guest speaker:

 

State of the Insurance Industry

 

 

Tuesday
March 26

 

Pricing a life annuity
This class session is in SFH 22E

 

 

Thursday
March 28
 

 

Lecture on Social Insurance
Black & Skipper, Chapter 22, Social Insurance

Enough to live on, Mar 25th 2004, The Economist

 

Tuesday
April 2

 

1994-95 Advisory Council on Social Security Technical Panel on Trends and Issues in Retirement Savings
Final Report
Executive Summary
 

A Summary of Saving Social Security
by Peter Diamond and Peter Orszag

Chilean Model: Rewards and Risks
Lessons from Chile

 

 

Thursday
April 4

 

Lecture on Retirement plans
Black & Skipper, Chapter 21, Retirement Plans

 

 
 

Tuesday
April 9

 

Lecture on Group Insurance
Black & Skipper, Chapter 18, Group Insurance

 

 

Thursday
April 11

 

Lecture on Health Insurance
Black & Skipper, Chapter 7, Health Insurance Policies


 

    

Tuesday
April 16

 

Health Care Reform
see Harrington's article and addendum

Lecture on Health care
Black & Skipper, Chapter 19, Health Care Plans: I
 

Bloom, F. E. (2003). "PRESIDENTIAL ADDRESS: Science as a Way of Life: Perplexities of a Physician-Scientist." Science 300 (5626): 1680-1685.

Pardes, H., K. G. Manton, et al. (1999). "MEDICINE: Effects of Medical Research on Health Care and the Economy." Science 283(5398): 36-37.

Lecture on Health care too
Black & Skipper, Chapter 20, Health Care Plans: II
 

 

State of the Union assignment

 

Thursday
April 18

Review for Exam Two
This class is in SFH 22E

 

Tuesday
April 23

Exam Two
This exam is in SFH 22E

 

Thursday
April 25

 

 

 

 

Tuesday
April 30

 

Review of Exam Two
This class is in SFH 22E

 

 

 

Thursday
May 2

 

Review for Final
This class is in SFH 22E

 

 

Monday
May 6 


Final Exam (3:10-5:10 PM)
This exam is in SFH 22E
 

 

 

 

   

 


Electronic Mail:

Assignments must be submitted via e-mail unless otherwise specified.


The Web:

You will be given a brief introduction to our use of the web during the first few weeks of class.  Lecture notes and other materials will be provided through these web pages or dropbox.


Course Evaluation:

  • Examinations.
    There will be two exams and a final. The exams will be essay questions.
    • Exam I:  March 7th, chapters 1-6
    • Exam II:  April 23rd, chapters 7-8, 18, 21, 22, Annuity lecture, other reading
    • Final: May 6th, 3:10-5:10 PM, SFH 22E, comprehensive

     

  • Grading.
    Course scores will be based on the following formula:

.1A + .9 max{F, .3 I + .3 II + .4 F, .5 I + .5 II},

where I, II, and F indicate the scores on exams one, two and the final, respectively. A represents an average of the assignment scores. The assignment score will be an average score for assignments given to you during the semester. All assignments will be pass or fail unless otherwise specified.  The pass and fail scores are one and zero, respectively.  Finally, at my discretion, the assignment score may also be based on class attendance and bonus points for attending specified functions. The course scores will determine your grade in the class as follows:

90-100

A

80-89

B

70-79

C

60-69

D

0-59

F

  • Reviews
    • Some class time will be allocated to review for the exams.
    • You may request the re-grade of an exam within a week after it is returned. Your score may be increased or decreased as indicated by any existing grading error.

Course Policies:

  • If you attend class but must leave before the end of class then let me know before class begins!  You may do this via e-mail if you prefer. Class attendance may be taken periodically and you are subject to losing assignment points if you leave class early without letting me know.
  • Assignments will be submitted via the web or in an e-mail message. If it is submitted as e-mail then the subject line of the e-mail message must correspond to the instructions on the assignment sheet for you to be given credit for the assignments. Send a copy of the assignment to yourself as proof that you submitted the assignment.
  • Students missing an assignment or exam without my prior permission will receive zero for it. Requests for an excused exam absence must be made prior to the exam; e-mail is preferred.
  • Make-up or extra work to improve your grade is not possible. Your final letter grade is determined solely by your exam, assignment scores, and class participation. In addition, no special considerations concerning your general academic situation can be offered. The final grade in the course, once assigned will not be changed except in the event of a grading error.
  • All tables, formulas and scratch paper will be provided with your exams. You must bring a picture ID to the exam sessions.
  • Any individual caught cheating will be disciplined to the maximum extent possible.
  • Exams will not be returned. They will be available for review during the week after the grades for that exam are posted. After that time, they will be stored.
  • Your exam score will be posted as soon as possible. Allow at least five working days for grading. If you feel that the posted grade is incorrect, you have one week from the date the grades are posted to bring the matter to my attention.
  • If you do not attend a class it is entirely your responsibility to determine what you have missed, including any administrative announcements I may have made. Not all announcements will be made electronically!
  • It is possible that a conflict may arise with the final in this course and a final in one of your other courses. I am willing to work with you in resolving this conflict. It is imperative that the conflict be brought to my attention at least two weeks before the scheduled final. After that time, no adjustments will be made and I will expect you to attend the final as scheduled.

Study Guidelines:

  • You need to understand what you are studying, whether it be conceptual or analytical. When you study, ask yourself questions such as:
    • What is the purpose of this concept or formula?
    • Why is it important?
    • How does the author demonstrate its importance?
    • How does it fit with what you have studied so far, either in this class or in an earlier class?
  • I suggest that you skim each chapter once right before it is discussed in class and then read it thoroughly after the topic is covered in class. If you are having trouble with a concept or problem then see me as soon as possible.
  • The lecture notes contain the important points in this course. Use them as a guide for your studying efforts.
  • Most students find the course material to be rigorous. Memorization of facts, definitions, etc., will not suffice.
  • Cramming right before an exam usually results in confusion, anxiety and a loss of the big picture!

 


Modification Date:  Tuesday, 29 May 2007 12:06 -0700
Comments to: Richard MacMinn