(80) purchases a whole life insurance policy of 100,000 .

You are given:

(i) The policy is priced with a select period of one year

(ii) The select mortality rate equals [math]80 \%[/math] of the mortality rate from the Standard Ultimate Life Table

(iii) Ultimate mortality follows the Standard Ultimate Life Table

(iv) [math]\quad i=0.05[/math]

Calculate the actuarial present value of the death benefits for this insurance

• 58,950
• 59,050
• 59,150
• 59,250
• 59,350

Copyright 2024. The Society of Actuaries, Schaumburg, Illinois. Reproduced with permission.

Answer: B

Superscript SULT refers to values from the SULT. Values without superscripts refer to this select life.

[[math]] \begin{aligned} & q_{80}=0.8 q_{80}^{S U L T}=0.0261264 \Rightarrow p_{80}=0.9738736 \\ & A_{80}=v q_{80}+v p_{80} A_{81}^{S U L T} \\ & \quad=(1.05)^{-1}(0.0261264)+(1.05)^{-1}(0.9738736)(0.60984)=0.59051 \\ & 100,000 A_{80}=59,051 \end{aligned} [[/math]]