Find the expected net profit of an insurance company on a life-insurance policy whose death benefit is $1,000,000 if the annual premium for the policy is $2000 and the chance of the customer dying within the next year is 0.002. Interpret. (show work)

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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.