Fill in the missing probability in the table and calculate

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Question: Life Insurance:

A life insurance company sells a term insurance policy to a 21-year-old male that pays $100,000 if that insured dies within the next 5 years. The probability that a randomly chosen male will die each year can be found in mortality tables. The company collects a premium of $250 each year as payment for the insurance. The amount X that the company earns on this policy is $250 per year., less the $100,000 that it must pay if the insured dies. The distribution of X is shown below. Fill in the missing probability in the table and calculate the mean earnings mx.

Age at Death (years):

Age of Death

 

21

22

23

24

25

>26

 

Earnings X
Probability

($99,750)

($99,550)

($99,250)

($99,000)

($98,750)

$1,250

 

0.00183

0.00186

0.00189

0.00191

0.00193

?

 

Reference no: EM13576354

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