Question

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.

Answer #1

TOPIC:Expectation of random variables .

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?

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...

An insurance company sells a $12,000, five-year term life
insurance policy to an individual for $640. Find the expected
return for the company if the probability the individual will live
for the next five years is 0.98. (Round your answer to the nearest
cent.)

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...

5. An insurance company charges a 21-year old male $250 for a
one year $100,000 life insurance policy. A 21-year old male has a
probability of .9985 of living one year. Find the expected value of
this life insurance policy and interpret the results. Please show
all work on how you came to your answer

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.

A $200,000 life insurance term policy costs $150 for 5 years of
coverage for a 30 year old male. If the male dies during those 5
years, the insurance company pays their family $200,000. If he
survives those 5 years, the insurance company will have collected
the $150 premium. The insurance company knows a 30 year old has a
0.000176 probability of dying over 5 years. What is the expected
profit for the insurance company on this policy?

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

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

Suppose an insurance company sells a
disability income insurance policy that will pay the policy holder
$100,000 in the event that he must quit his job due to a serious
illness. Policy holders pay $200 to purchase the policy. Previous
data shows that the probability that a policy holder will have to
quit his job due to a serious illness is 1 out of 750.
a) Should the insurance company expect
to make a profit off the sale of this...

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