an insurance company charges john $250 for a one year $100,000 life insurance policy. because john is healthy, there is a 0.9985 probabilty that he will live for a yr. what would be the cost of the policy if the company just breaks even instead of make a profit.
the expected value to john for this polity is = -$ 100
what does it mean by the cost of the policy?
isit $ 100 + $250 = $350?