Question

\My medical insurance is setup a bit odd. It pays 100% of the first $2,500 of medical expenses, zero for the next $2,000 in medical expenses and then covers 90% of my medical expenses above these amounts up to a maximum of $100,000. Draw the payoff diagram for my insurance policy. (Ch 16)

Answer 1

It is assumed that the Total Value of Medical Expenses covered under Insurance is for $100000.

Extra Concepts herein below,

Now, If the Question would have stated that the total Insurance pay off covered is upto $100000 then the Expenditure Value would have been more higher & calculation method would have been different : herein below:

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