A life insurance company sells a $250,000 1-year term life insurance policy to a 20-year-old female
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A life insurance company sells a $250,000 1-year term life insurance policy to a 20-year-old female

[From: ] [author: ] [Date: 11-10-11] [Hit: ]
999544 = 0.E[x] = 200 - 250000*0.......
for $200. According to the National Vital Statistics Report. 56(9), the probability that the female survives the year is 0.999544. Compute and interpret the expected value of this policy to the insurance company


- I also have to find the probability that the company has to pay the female Im suppose to get .000456 but don't know how to get this?

-
P[female DOESN'T survive] = 1-0.999544 = 0.000456

E[x] = 200 - 250000*0.000456 = $86 <---------
1
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