This is a statistics probability question. My full question is below.?

Suppose that a life insurance company sells a $250,000 one-year term life policy to a 20 year-old male for $350. According to the National Vital Statistics Report, the probability that the male survives the year is 0.998611.





Create a distribution table where x represents the amount of profit for the insurance company and compute the expected value or profit of this policy to the insurance company.

This is a statistics probability question. My full question is below.?
The probability that the man dies is 1 - 0.998611, and the profit would be a loss of (250000 - 350)





Amount of profit | Probability | Amount of profit * probability





$350 ... ... ... ... ..| 0.998611 ..| 349.51385


$ -249650 ... ... .| 0.001389 ..| -346.76385





Expected value is the sum of the third column, which is:





$2.75





Expected profit is $2.75
Reply:P(lives) = 0.998611 and they are $350 ahead


P(he dies)= 1 - .998611 and they are (250,000 - $350) ahead


So:


The expected Return is: =


.998611* 350 + .001389*(-249650) =


$2.75


I do hope they do not have a lot of overhead or they have some profitable investments.
Reply:P( the guy lives ) = P(company gains 350) = 0.998611





P( the guy dies )


= P(company pays (250000 - 350 = 249650))


= 1 - 0.998611 = 0.001389





The expected amount of money the insurance company will pay is:





P(gain 350) * P(the guy lives) + P(pays 249650) * P(guy dies)





= 350 * 0.998611 + - 249650 * 0.001389


= 2.75





the insurance company can expect to make a $2.75 profit.
Reply:I am not sure if this is what you are looking for, but...





the probability the person dies in the year is


1-0.998611, so the expectation payout per policy is 250,000*(1-0.998611)=347.50, which means they would make a profit of 2.50 per such policy, so I guess they have to sell a lot of policies to make it worth their while.

my cat