According to the Centers for Disease Control and Prevention, a 40-year-old woman has a 15 in 10,000 chance of dying in the next year. If a group of 670 women who are 40 years old wish to purchase a life insurance policy that will pay $1,000,000 if they die in the next year, how much will an insurance company charge each of these women this year for an actuarially fair policy? Assume that payouts on policies are the insurance company's only costs. Round your answer to the nearest whole dollar. charge per woman: $__
According to the Centers for Disease Control and Prevention, a 40-year-old woman has a 15 in 10,000 chance of dying in the next year. If a group of 670 women who are 40 years old wish to purchase a life insurance policy that will pay $1,000,000 if they die in the next year, how much will an insurance company charge each of these women this year for an actuarially fair policy? Assume that payouts on policies are the insurance company's only costs. Round your answer to the nearest whole dollar. charge per woman: $__
Chapter1: U.s. Medical Care: An Uncertain Future
Section: Chapter Questions
Problem 3QAP
Related questions
Question
According to the Centers for Disease Control and Prevention, a 40-year-old woman has a 15 in 10,000 chance of dying in the next year.
If a group of 670 women who are 40 years old wish to purchase a life insurance policy that will pay $1,000,000 if they die in the next year, how much will an insurance company charge each of these women this year for an actuarially fair policy?
Assume that payouts on policies are the insurance company's only costs. Round your answer to the nearest whole dollar.
charge per woman: $__
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc