Question

A 20-year-old female purchases a 1-year life insurance policy worth $250,000. The insurance company determines that...

A 20-year-old female purchases a 1-year life insurance policy worth $250,000. The insurance company determines that she will survive the policy period with probability 0.9995.

(a) If the premium for the policy is $300, what is the expected profit for the company?

(b) At what value should the insurance company set its premium so its expected profit will be $250 per policy for 20-year-old females?

Math   Precalculus   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

please like and comment.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
a 30 -year old woman purchases a $200,000 term life insurance policy for an annual payment...
a 30 -year old woman purchases a $200,000 term life insurance policy for an annual payment of $460. Based on a period life table for the U.S. Government, the probability that she will survive the year is 0.999051. Find the expected value of the policy for the insurance company. Round to two decimal places for currency problems.
6. A 35-year-old woman purchases a $100,000 term life insurance policy for an annual payment of...
6. A 35-year-old woman purchases a $100,000 term life insurance policy for an annual payment of $360. Based on a period life table for the U.S. government, the probability that she will survive the year is 0.999057. Find the expected value of the policy for the insurance company. need a step by step description via excel
Suppose a life insurance company sells a ​$190,000 ​one-year term life insurance policy to a 20​-year-old...
Suppose a life insurance company sells a ​$190,000 ​one-year term life insurance policy to a 20​-year-old female for ​$330. The probability that the female survives the year is 0.999502. Compute and interpret the expected value of this policy to the insurance company.
Sam is applying for a single year life insurance policy worth $45,750.00$. If the actuarial tables...
Sam is applying for a single year life insurance policy worth $45,750.00$. If the actuarial tables determine that she will survive the next year with probability 0.9980.998, what is her expected value for the life insurance policy if the premium is $429.00$?
And insurance company sales a one year term life insurance policy to an 80-year-old woman. The...
And insurance company sales a one year term life insurance policy to an 80-year-old woman. The woman pays a premium of $1000. If she dies within one year the company will pay $20,000 to her beneficiary. According to the US centers for disease control and prevention the probability that a 80-year-old woman will be a live one year later is 0.9516. But X be the profit made by the insurance company. Found the probability distribution in the ass but the...
There is a .9968 probability that a randomly selected 50-year-old female will live through the year....
There is a .9968 probability that a randomly selected 50-year-old female will live through the year. A life insurance company charges $226 for insuring that the female will live through the year. If she does not survive the year, the policy pays out $50,000 as a death benefit. A. From the perspective of the 50-year-old female, what are the values corresponding to the two events of surviving the year and not surviving the year? B. What are the probabilities associated...
A customer buys a $250,000 life insurance policy with an annual premium of $600. Her probability...
A customer buys a $250,000 life insurance policy with an annual premium of $600. Her probability of dying during the year is 0.002. If she dies, the insurance company will have to give her beneficiary $250,000. Calculate the insurance company’s expected value for this policy. And what does the expected value represent?
A 20-year-old woman takes out a $12,000 one-year life insurance policy that costs $110. Mortality tables...
A 20-year-old woman takes out a $12,000 one-year life insurance policy that costs $110. Mortality tables indicate that the probability that a 20-year-old women will die within a year is 0.006. (Note: the policy is for one year) Fill in the values for a probability model for the company’s profit on a 20-year-old woman’s policy. Outcome x    P(X=x) She lives the whole year She dies within the year 0.006
1.A man purchased a $21,000, 1-year term-life insurance policy for $350. Assuming that the probability that...
1.A man purchased a $21,000, 1-year term-life insurance policy for $350. Assuming that the probability that he will live for another year is 0.985, find the company's expected net gain. 2.A man wishes to purchase a life insurance policy that will pay the beneficiary $20,000 in the event that the man's death occurs during the next year. Using life insurance tables, he determines that the probability that he will live another year is 0.95. What is the minimum amount that...
1. An insurance company sells a $90,000 one-year term life insurance policy for a premium of...
1. An insurance company sells a $90,000 one-year term life insurance policy for a premium of $458. Find the expected value to the company of a single policy if 99.53% of the insured people survive one year. A. $35 B. $55 C. $458 D. $89,542 2. 47% of all people in a community favor the development of a mass transit system, while only 18% of the people in that community both favor it and do not own a car. If...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT