An insurance company sells an insurance policy to individuals for $1,000 per year. If the person dies that year, then the insurance company will pay the family $100,000. If the person becomes disabled and unable to work that year, then the insurance company will pay the family $50,000. Actuaries at the insurance company estimate that 1 out of 1,000 policy holders will die each year, and 2 out of 1,000 policy holders will become disabled. What is the expected profit per person per year for the insurance company?
An insurance company sells an insurance policy to individuals for $1,000 per year. If the person dies that year, then the insurance company will pay the family $100,000. If the person becomes disabled and unable to work that year, then the insurance company will pay the family $50,000. Actuaries at the insurance company estimate that 1 out of 1,000 policy holders will die each year, and 2 out of 1,000 policy holders will become disabled. What is the expected profit per person per year for the insurance company?
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.57TI: What is the total effect on the economy of a government tax rebate of $1,000 to each household in...
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An insurance company sells an insurance policy to individuals for $1,000 per year. If the person dies that year, then the insurance company will pay the family $100,000. If the person becomes disabled and unable to work that year, then the insurance company will pay the family $50,000. Actuaries at the insurance company estimate that 1 out of 1,000 policy holders will die each year, and 2 out of 1,000 policy holders will become disabled. What is the expected profit per person per year for the insurance company?
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