The cost of health insurance is $1,200 per year. The cost of an operation for a

Question

The cost of health insurance is $1,200 per year. The cost of an operation for a dramatic injury is $500,000. The chances of someone needing such an operation are 47.3% over a twenty year period. From a purely financial point of view, are you better off taking out the insurance or not? Choose the best answer.

Question options: No. The insurance company must make a profit.

Yes. The cost of the insurance is less than the probability cost of the operation

No. The probality of needing the operation is less than 50%.

Yes. Buying insurance is always a good idea.

Explanation / Answer

cost of insurance per year is $1200

for dramatic injury is $500000

500000/1200=416.666

from 20 years the probabilty of persons need is 47.3%

so answer is No. The probality of needing the operation is less than 50%.

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