Life Insurance A 35-year-old woman purchases a $100,000

Chapter 5, Problem 18E

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QUESTION:

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.

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QUESTION:

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.

ANSWER:

Step 1 of 2

Given, A 35-year-old woman purchases a term life insurance policy = $100,000.

The annual payment = $360. And

The probability that she will survive the year = 0.999057.

Here we need to find the expected value of the policy for the insurance company. 

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