Question

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

Answer 1

i am denoting gain of the company by +sign and loss by - sign.

the necessary probability distribution table be:-

X (in $)	P(x)
360-100000 = -99640	(1-0.999057) = 0.000943
360	0.999057

the expected value of the policy for the insurance company be:-

the company will expect a gain of $ 265.7

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