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I Like My Odds

I recently bought a term life insurance policy. Based on the annual premiums I will pay I can determine my chances of dying in the next 30 years (at least according to the life insurance company's estimation).

If I assume a modest return of 7% (compounded annually) on the premiums I pay to the life insurance company then the maximum chance I have to die over the next 30 years is 7.42%. However, my chances are probably substantially better because the insurance company has to profit from my premiums. So my actual chance of dying over the next 30 years is probably around 5%.

I like those odds. In a strange way it's comforting to know that I'll probably be alive in 2040.

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