Question

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?

Answer #1

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...

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.

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.

Your mother purchased a $200,000 life insurance policy many
years ago. Over the life of the plan she pays $50,000 in premiums.
She dies in the current year and you are approached by the company
to take either $25,000 for 10 years or a cash value of $170,000.
How are your taxes affected in the current year if you choose the
annual plan?

Juanita purchased a life insurance policy on her
60thbirthday. Her monthly contribution to her life
insurance fund is $150. When she dies, her beneficiary will be
awarded $100,000. Calculate the expected value of
the insurance payout, if she dies exactly 1 year after she
purchases the policy. probability of dying between 52-72 =
.078
We know, thatif she
dies, she will get the full $100,000. But what is the EXPECTED
VALUE of her return from the policy at the end...

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?

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...

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?

An insurance company offers a $120,000 term life policy lasting
2 years to a man of average health aged 50. To value the policy,
the company has four conditions: (1) the yearly interest or
discount rate is 4%, (2) the compounding or discounting is done
every 6 months, (3) the premium is made once at the start of a
year, and (4) the payout occurs at the end of a
year. What is the company’s break-even yearly premium?

A retired statistician was interested in determining the average
cost of a $200,000.00 term life insurance policy for a 60-year-old
male non-smoker. He randomly sampled 65 subjects (60-year-old male
non-smokers) and constructed the following 95 percent confidence
interval for the mean cost of the term life insurance: ($850.00,
$1050.00). Explain what the phrase "95 percent confident" means in
this situation.

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