Question
In: Statistics and Probability
Maybe you have considered buying a term life insurance policy. The expected value of any term...
Maybe you have considered buying a term life insurance policy. The expected value of any term life insurance product yields a positive expected value for the insurance company and a negative expected value for you, meaning the insurance company will make profits by selling their insurance products. Would you still buy the term life insurance? Why or why not? Are there other examples other than insurance that uses this same concept?
Solutions
orchestra answered 2 years agoRelated Solutions
An insurance company will pay the face value of a term life insurance policy if the...
An insurance company will pay the face value of a term life
insurance policy if the insured person dies during the term of the
policy. For how much should an insurance company sell a 10-year
term policy with a face value of $40,000 to a 30-year-old man for
the company to make a profit? The probability of a 30-year-old man
living to age 40 is 0.97. Explain your answer. Remember that the
customer pays for the insurance before the policy...
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...
The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $28618 per year
forever. If the required return on this investment is 7 percent,
how much will you pay for the policy?
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...
The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $30,000 per year
forever. Suppose a sales associate told you the policy costs
$475,000. At what interest rate would this be a fair deal? (Round
your answer to 2 decimal places. (e.g., 32.16))
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...
The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $ 25,000 per
year forever. If the required return on this investment is 8
percent, how much will you pay for the policy?
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...
The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $29150 per year
forever. If the required return on this investment is 7.2 percent,
how much will you pay for the policy? (Round time value factors to
6 decimal places and final answer to the nearest dollar
amount.)
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will...
The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $26,000 per year
forever. If the required return on this investment is 5.3 percent,
how much will you pay for the policy? Present Value?
1. The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that...
1. The Maybe Pay Life Insurance Co. is trying to sell you an
investment policy that will pay you and your heirs $35,000 per year
forever. Suppose a sales associate told you the policy costs
$800,000. At what interest rate would this be a fair deal? (Do not
round intermediate calculations and enter your answer as a percent
rounded to 2 decimal places, e.g., 32.16.)
2. Your credit card company charges you 1.41 percent per month.
What is the EAR...
An insurance company considers the present value of a 10-year term life insurance policy to be...
An insurance company considers the present value of a 10-year
term life insurance policy to be $3,738. The premiums that the
company collects are $55 at the beginning of every month for the 10
years. What monthly compounded nominal rate is implied in the
calculation of the policy's value?
A lottery prize of $2,250,000 per year, payable at the beginning
of every year for 20 years can also be collected as a single lump
sum payment of $23,500,000. What effective...
You have the opportunity to purchase a $150,000 Term life insurance policy for $145 per year...
You have the opportunity to purchase a $150,000 Term life
insurance policy for $145 per year for the next four years. Your
bank has offered you credit life insurance in conjunction with a
$12,000 four-year (48-month) loan you are applying for. The credit
life insurance premium would be a one-time-up-front fee of $325.
What is the annual cost per $1,000 of insurance for the term life
insurance and the credit life insurance? $0.97 per thousand for
Term Life Insurance and...
Prudent policy life insurance co. offers a 10 year term life insurance policy with a $250000...
Prudent policy life insurance co. offers a 10 year term life
insurance policy with a $250000 benefit and annual premiums of
$200, paid at the beginning of each year. If prudent can earn 8% on
invested capital, what is the present value to the firm of the
premiums from one policy, assuming the policy holder outlives the
policy term?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Which subnet (network address) does host 25.17.102.51 255.255.248.0 belong to?
- Joe Dokes retired today with $1,000,000 in his retirement nest egg. If he followed a cash...
- how is biopsychosocial compatiable model in the future.
- Give at least 5 nursing interventions (with rationale) of nursing diagnosis: Health-seeking behaviors related to patient’s...
- The Wall Street Wizard Co. sold a stock market investing plan through the mail that made...
- Rotating bits in C This rotates bits to the left which means the bits that were...
- Implement a method that meets the following requirements: (a) Takes as parameter 1) an int array...
ADVERTISEMENT