Question

A 20​-year-old woman wants to purchase a ​$100​,000 ​one-year life insurance policy. What should the insurance company charge the woman for the policy if it wants an expected profit of ​$50​?

Answer 1

To determine the premium for a ​$100,000 one-year life insurance policy for a 20-year-old woman, we need to consider the expected profit the insurance company wants to make. However, without the provided mortality rate, we cannot calculate the premium accurately.

Step-by-step explanation:

To determine the premium that the insurance company should charge the 20-year-old woman for the ​$100,000 one-year life insurance policy, we need to consider the expected profit the company wants to make.

In this case, the expected profit is ​$50. To calculate the premium, we can use the formula:

Premium = (Policy Value + Expected Profit) / (1 - Mortality Rate)

Using the information provided, we know that the policy value is ​$100,000, the expected profit is ​$50, and we need to find the mortality rate.

Since the question doesn't provide information about the mortality rate, we cannot calculate the premium accurately.