$40 x 12 months X 10 years = $4,800
$500,000 divided by $4,800 = 104.17
The insurance company believes that if they insure at least 105 like you for 10 years, they’ll turn a profit as they risk forecasters (actuaries) believe the odds of someone dying is less than 1 in 104.
Insurance company makes a profit if the odds are lower and/or they can insure more people with the same risk profile
(Add in margin, admin cost, advertising etc but the principal is the same)
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