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An Insurance Company Sells a 20-Year Term Life Insurance Policy

Question 2

Multiple Choice

An insurance company sells a 20-year term life insurance policy with a face value of $200,000 to a 45-year -old woman.Her annual premium is $990.If the woman dies after paying premiums for 6 years,what is the insurance company's gain or loss?


A) Loss of $194,060
B) Gain of $199,010
C) Loss of $200,990
D) Gain of $205,940

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