SOLUTION: A 32 year old woman purchases a 100,000 term life insurance policy for an annual payment of $310. Based on a period life table for the U.S. Government, the probability that she wil
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Question 1112636: A 32 year old woman purchases a 100,000 term life insurance policy for an annual payment of $310. Based on a period life table for the U.S. Government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A 32 year old woman purchases a 100,000 term life insurance policy for an annual payment of $310. Based on a period life table for the U.S. Government, the probability that she will survive the year is 0.999052. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems.
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Random values for the company:: +310........-99690
Corresponding probabilities:::: 0.999052.....0.000948
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Expected value to company = 310*0.999052 - 99690*0.000948 = $215.20
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Cheers,
Stan H.
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