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Expected returns are a constant per year

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You will retire in 35 years, and plan to move to the Southwestern US. You are considering buying a new insurance product that will cover your US health care costs in retirement. The monthly insurance premium is $40 and you will pay this amount at the end of each month until you retire. You anticipate that you will live for 20 years in retirement, and that your health care expenses will be $10000 in the first year, and will grow at the rate of 10% per year. Expected returns are a constant 12% per year. Should you buy this product?

Reference no: EM132284930

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