Logic & Reasoning Assignment 2

Assume the following scenario:
A life insurance agent visits a 43-year old, married father of three children. The insurance agent points out that the father is the only working adult in the household, and earns about $130,000 per year. At current earning rates, the father needs 10 years to pay off the house mortgage and put his three kids through university. If the father were to die during that time, the family would be left in quite a difficult financial situation, trying to pay off the funeral, the mortgage, and university costs.
The agent points out that the father has a 4.8% chance of dying by the age of 53, so he should make sure that he gets enough term (that is: time-limited) life insurance to cover his mortgage and estimated university fees for the next 10 years. The total amount of insurance the agent is proposing is $750,000, and will cost the father $76 per month.
The father answers that he doesnt like the price. After all, if I take the same $76/month and put it into investments, Ill make $9,265 in 10 years. And I have over a 95% chance of living! The agent answers that this would require an interest rate of 15% annually, and that most investment portfolios these days are lucky to get 7-8. The father answers that he can beat the market norm, because hes good at seeing companies on the rise and trading stock options. He has only gotten 7% average so far, but hes getting better and better at it every day. Plus, he adds Thats $76 hard-earned dollars per month, for TEN YEARS, that is probably 95.2% chance just being flushed down the toilet.
The agent also mentions that he commonly works with middle-aged working men, and that virtually all of them with non-working wives and school-aged children see the need in at least term life insurance just in case, so he thinks the father should reconsider his approach to this matter. Plus, the father is only a standard health rating. The father answers that his health is not a real concern, because his mother and father both lived well into their 80s.
Do the following three things:
Using a search engine, confirm mortality percentages given by the insurance agent and search S & P index returns since 2000 to find the actual market average annual returns. In other words, fact check both of their claims. Explain briefly how your findings compare to the numbers mentioned above.
List and describe one or more cognitive biases affecting each of the participants in the argument.
Give a brief (1-2 paragraph) explanation of what the father should do regarding the life insurance purchase. Justify your answer by explaining how you have reasoned to this conclusion

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