A life insurance company offers a customer a 4-year terms policy with death benefit (DB)...
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A life insurance company offers a customer a 4-year terms policy with death benefit (DB) of $100,000. Assume the mortality (death) rate assume she is alive at the beginning of the year for the next 4 years are: 0.00035, 0.0005, 0.00075 and 0.001 (notice these are conditional probabilities) respectively and there isnt any other decrement or other CF. Assume DB is paid at year end. Compute the companys PV of DB using 4% interest, round to nearest cents.
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