The probability that a 24-year-old female in the United States will die within 1 year is approximately 0.0005112. If an insurance company sells a 1-year, $30,000 life insurance policy to a 24-year-old for $895, what is the company's expectation (in dollars)?
company's expectation = (30000-895)*(1-0.0005112)+(-895*0.0005112) = 29089.664
The probability that a 24-year-old female in the United States will die within 1 year is...
The probability that a 22-year-old female in the U.S. will die within one year is approximately 0.00044. If an insurance company sells a one-year, $25,000 life insurance policy to such a person for $95, what is the company's expectation? (Round your answer to the nearest dollar.)
The probability that an 80-year-old male in the U.S. will die within one year is approximately 0.069941. If an insurance company sells a one-year, $14,000 life insurance policy to such a person for $455, what is the company's expectation? (Round your answer to two decimal places.)
The probability that a 25-year-old female in the U.S. will die within one year is about 0.000514. An insurance company is preparing to sell a 25-year-old female a one-year, $40,000 life insurance policy. How much should it charge for its premium in order to have a positive expectation for the policy? (Round your answer to the nearest dollar.)
A life insurance company sells a $200,000 1-year life insurance policy to a 20-year-old female for $300. According to the National Vital Statistic Report, the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company.
Suppose a life insurance company sells a $240,000 one-year term life insurance policy to a 20-year-old female for $330. The probability that the female survives the year is 0.999458. Compute and interpret the expected value of this policy to the insurance company. The expected value is $|| 1. (Round to two decimal places as needed.)
Suppose a life insurance company sells a $280,000 one-year term life insurance policy to a 22-year-old female for $290. The probability that the female survives the year is 0.999583. Compute and interpret the expected value of this policy to the insurance company.
Suppose a life insurance company sells a $180,000 one-year term life insurance policy to a 20-year-old female for $220. The probability that the female survives the year is 0.999594. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ .
Suppose a life insurance company sells a $230,000 one-year term life insurance policy to a 19-year-old female for $220. The probability that the female survives the year is 0.999516. Compute and interpret the expected value of this policy to the insurance company. The expected value is Round to two decimal places as needed.)
Suppose a life insurance company sells a $150,000 one-year term life insurance policy to a 21-year-old female for $340. The probability that the female survives the year is 0.999561. Compute and interpret the expected value of this policy to the insurance company. The expected value is $ . (Round to two decimal places as needed.) Which of the following interpretation of the expected value is correct? O A. The insurance company expects to make an average profit of $339.85 on...
A $21,000 ordinary life insurance policy for a 23-year old female can be obtained for annual premiums of approximately $200. This type of policy (ordinary life) would pay a death benefit of $21,000 in exchange for the annual premium paid during the lifetime of the insured person. If the average life expectancy of a 23-year old female is 63 years, what interest rate establishes equivalence between cash outflows and inflows for this type of insurance policy? Assume all premiums are...