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If an insurance company sells a 150,000 life insurance policy for 600 premium per year and the probability of living out the year is .9965, what is the expected value to the insurance company

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 6MC: You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years....

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Concept explainers

Types of Insurance Contract

Insurance is a contract wherein an individual or entity gets financial protection from the insurance company for any damages or losses incurred. The individual or entity is called the insured, whereas the insurance company is called the insurer. The insured and the insurer enter a legal contract for a fixed term called the insurance term, and the contract is called an insurance policy.

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If an insurance company sells a 150,000 life insurance policy for 600 premium per year and the probability of living out the year is .9965, what is the expected value to the insurance company

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