SOA Exam P Sample Question 317
Study guide: Exam P-1
A five-year term insurance policy pays 25,000 if the insured dies in the first year. The benefit declines by 5,000 per year for each of the next four years. In each of the five years covered by the policy, the probability of dying is 0.01, given that the insured is alive at the beginning of that year.
Calculate the expected benefit the insurance company will pay during the five-year term.
- A) 692
- B) 740
- C) 750
- D) 985
- E) 1225
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