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ABy Admin
Jan 19'24
Exercise
For a special fully discrete whole life insurance policy of 1000 on (90), you are given:
(i) The first year premium is 0
(ii) [math]\quad P[/math] is the renewal premium
(iii) Mortality follows the Standard Ultimate Life Table
(iv) [math]\quad i=0.05[/math]
(v) Premiums are calculated using the equivalence principle
Calculate [math]P[/math].
- 150
- 160
- 170
- 180
- 190
Copyright 2024. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.
ABy Admin
Jan 19'24
Answer: D
EPV [math]([/math] Premiums [math])=P a_{90}=P\left(\ddot{a}_{90}-1\right)=(4.1835) P[/math]
[math]\operatorname{EPV}([/math] Benefits [math])=1000 A_{90}=1000(0.75317)=753.17[/math]
Therefore,
[[math]]
P=\frac{753.17}{4.1835}=180.03
[[/math]]
Copyright 2024. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.