Life insurance money A life insurance company sells a term insurance policy to a 21-year-old male that pays \$100,000 if the insured die within the following 5 years. The probability that a randomly favored male will certainly die each year can be uncovered in mortality tables. The firm collects a premium the \$250 every year as payment for the insurance. The quantity Y the the firm earns top top this policy is \$250 per year, less the \$100,000 that it should pay if the insured dies. Below is a partly completed table that shows information about risk the mortality and the worths of Y = profit earned through the company:

(a) describe why the agency suffers a lose of \$98,750 on together a policy if a client dies at age 25.

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(b) uncover the missing probability. Show your work.

(c) calculation the average mY. Interpret this value in context.

jan 25 2021 07:32 pm

Priyanka reply on January 27, 2021
1) If a customer dies at period 25, he has actually paid to the firm premium that \$250 because that 5 years each which is a complete of 250*5 = \$1250

The company pays \$100,000 on his death. So...
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