Question

a 28 year old man plays 165 for a one year life insurance policy with coverage of 140000 if the probability that he will live through the year is 0.9994 what is his expected value for the insurance polixy

Answer 1

The insurance policy's anticipated value is -$81 for the one year life insurance policy.

Explain the term insurance policy?

• Term insurance is a form of life insurance policy which offers protection for a certain "term" of years, or a set amount of time.
• A deceased person will be paid if the insured passes away while the term insurance is still in effect and the insurance is active.

Consider the various factors and the man's potential benifits.

-$165 because he already paid that sum.

The beneficiary could earn as a potential profit.

140000-165 = $139835

The probability of surviving is 0.9994.

The likelihood of not living is 0.0006.

The expected value is given by;

E(v) = (-165)(0.9994) + (139835)(0.0006)

E(v) = -164.901 + 83.901

E(v) = -81.

Thus, the insurance policy's anticipated value is -$81.

To know more about the insurance policy, here

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