1. Under the human life approach, what is the benefit amount in the following situation:

John is a client of the Insurance Company A. He signed up a life insurance contract under the human life approach. Suddenly at the age of 35, John passed away in an accident. His family is devastated. The family was heavily dependent on John as he provided for 60% of his monthly salary to the family. He was looking towards a retirement at the age of 65 with a life expectancy of 75. His present salary is $40,000 per year and it would have increased to $50,000 after 10 years, and a further $5,000 after 15 years. If the appropriate discount rate is 9%, what is the benefit amount under the human life approach. (hint: Calculate the salaries changes first and do the present value for each change by using annuity and lumpsum where applicable)

2. What are the major operations of an insurance company? What is unearned premium reserve and why is it important for insurance companies? How do you think investments help insurance companies?