The long island life insurance company sells a term life insurance policy if the policyholder dies during the term of the policy the company pays 0,000. if the person does not die the company pays out nothing and there is no further value to the policy. the company uses actuarial tables to determine the probability that a person with certain characteristics will die during the coming year. for a particular individual it is determined that there is a 0.001 chance that the person will live and the company will pay out nothing. The cost of this policy is $200 per year. Based on the EMV criterion Should the individual by this insurance policy? How would utility theory help explain why a person would buy this insurance policy?
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