Composite Premium Calculator

Calculate Composite Premium (CP)



Formula

The formula to calculate the Composite Premium (CP) is:

\[ CP = \frac{TP}{N} \]

Where:

What is a Composite Premium?

A composite premium is a single rate that is applied to all employees in a group, regardless of individual risk factors. This type of premium is often used in group insurance plans, where the insurer calculates an average rate based on the overall risk profile of the group. The composite premium simplifies the billing process and ensures that all employees are charged the same amount for their coverage. It is particularly useful for employers who want to offer uniform benefits to all employees without having to manage individual premium rates.

Example

Let's say the total premium for all employees (TP) is $50,000, and the number of employees (N) is 100. Using the formula:

\[ CP = \frac{50,000}{100} = 500 \]

So, the Composite Premium per Employee (CP) is $500.

Extended information about "Composite-Premium-Calculator"

Composite Figure Calculation Formula

Definition: Composite figures are shapes that consist of two or more geometric figures.

Formula: The area of a composite figure is the sum of the areas of its individual shapes.

Example: \( A = 20 + 15 + 30 \)

Calculate Composite Function

Definition: A composite function is a function that is composed of two other functions.

Formula: \( (f \circ g)(x) = f(g(x)) \)

Example: \( f(x) = 2x + 3 \) and \( g(x) = x^2 \), then \( (f \circ g)(x) = 2(x^2) + 3 \)