Question
Jim is a 60-year-old Anglo male in reasonably good health. He wants to take out a $50,000 term (i.e., straight death benefit) life insurance policy
Jim is a 60-year-old Anglo male in reasonably good health. He wants to take out a $50,000 term (i.e., straight death benefit) life insurance policy until he is 65. The policy will expire on his 65th birthday. The probability of death in a given year is provided.
x = age | 60 | 61 | 62 | 63 | 64 |
---|---|---|---|---|---|
P(death at this age) | 0.01027 | 0.01393 | 0.01663 | 0.02077 | 0.02356 |
What would be the total expected cost to Big Rock Insurance over the years 60 through 64 (in dollars)? (Enter a number. Round your answer to two decimal places.) $ (c) If Big Rock Insurance wants to make a profit of $700 above the expected total cost paid out for Jim's death, how much should it charge for the policy (in dollars)? (Enter a number. Round your answer to two decimal places.) $ (d) d)If Big Rock Insurance Company charges $5000 for the policy, how much profit does the company expect to make (in dollars)? (Enter a number. Round your answer to two decimal places.)
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