Term life insurance and death probability | Finance & Capital Markets | Khan Academy

Understanding an insurance company's sense of my chances of dying. Created by Sal Khan.

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Finance and capital markets on Khan Academy: It is a bit of a downer to think about, but we are all going to die. Do we care what happens to our loved ones (if they really are "loved" than the answer is obvious). This tutorial walks us through the options to insure our families against losing us. The reason why we stuck it in the "investment vehicles" topic is because it can also be an investment that we can use before we die.

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[choppera]

100 Sals! The worlds math problems would be solved!

[PraveenKumar-yvzn]

Hey Sal, great to see that you're alive, and i hope your mortgage has been paid off :P

[MrNimbus]

You're not dying! Not on my watch!

[ThePeterDislikeShow]

Why are insurance bills called PREMIUMS?

[VanillaDazzle]

I bet by now he has his house paid off.

[robertstan]

This was posted 10 years ago, 10 more years and Mr. Khan will have to make a history lesson about Sal.

[msb]

i was a kid in Year 1at school, when this video has been uploaded !

[alphadnu]

With 100 Sals, we can create a school, with its own education system based on mentor-disciple principle, and create thousands of geniuses every year

[dracks]

please also do upload numerical questions related to whole & term life insurance.

[meanmanturbo]

Nice and easy, clear as always. Though this really needs to take discount rate in account. Though that would be complex. Wouldn't you also need a distribution of when during those 20 years there would be one less Sal's among come think of it? It would be more likely during the last years after all. maybe a good reason not to do it more advanced I guess:D

[shakilmujeeb]

Thanks a lot Sal. I was expecting a lot more complex example rather than such a simplistic one

[MrVaibhav]

This is the break even only if one sal dies exactly after 20 years (after paying his premium for 20 years, not in anytime in the 20 years ). If he dies anytime before that 20 years, the insurance will face loss. So, the probability of sal dying in the next 20 years is sadly greater than a 1 in 100.

[EscortsSociety]

Thanks for this video, I know a thing or two about actuarial sciences now!

[Slide]

Before applying assess your situation. The application process is not just about your current health it is about your health, financial, and personal history - ALL OF IT.Be sure you are comfortable with giving insurance companies full access to that information. Also, the questions are totally invasive so any mis-communication can be used against you as a reason to deny coverage to your beneficiaries. My advice is live as healthy as possible, save your money, and don't go into debt.

[ThePeterDislikeShow]

Don''t you also have to account for the investment return the insurance company can make in 20 years before a potential payout?

[boeinglr]

Hey Sal, even I found listening to this a bit morbid. It flashes not so pleasant pictures in my mind. May be you can do another similar video with some different analogy and not talk of your death. But really informative video. Always a pleasure listening to you! Thanks.

[Abrakababra]

No, If some one dies, no more premium and so its not <= 1/100, its < 1/100

[TimothyCihal-pnfm]

Less then 1% of term policies are claimed. Term policies are not a good bet, whole life or Universal policies pay 100% claim rate if premiums are paid!

[akhilpandey]

7 people didn't like the idea of Sal's death

[Otterly_Sleepy]

I don’t know why, but every other video on my YouTube works perfectly normal, but this one keeps freaking out