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There is a 1 percent chance that you will have healthcare bills of $100,000, a 19...

Question:

There is a 1 percent chance that you will have healthcare bills of $100,000, a 19 percent chance that you will have healthcar
There is a 1 percent chance that you will have healthcare bills of $100,000, a 19 percent chance that you will have healthcare bills of $10,000, a 60 percent chance that you will have healthcare bills of $500, and a 20 percent chance that you will have healthcwre bills of $0 a) Suppose now you have a policy with a $5,000 deductible. What will your expected out-of-pocket spending be? What will your expected insurance benefits be? Assumkng that a premium equals 116 percent of expected insurance benefits, do you prefer the policy with a $5,000 deducitble or complete coverage?

Answers

. Answer - ist case it pacent chance that you will have healthcare bills $100,000 outo poccat Sopenses in medical Bill = 5000Annual Doemium = 1900 X1164 E 2204 Total Expected Expense in case of a Insurance policy with sooo deductible 9 1300+2204 =350

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