For a fully discrete whole life insurance on (60), you are given:

(i) Mortality follows the Standard Ultimate Life Table

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

(iii) The expected company expenses, payable at the beginning of the year, are: - 50 in the first year - 10 in years 2 through 10 - 5 in years 11 through 20 - 0 after year 20

Calculate the level annual amount that is actuarially equivalent to the expected company expenses.

• 7.5
• 9.5
• 11.5
• 13.5
• 15.5

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

Answer: B

[math]\ddot{a}_{60: 101}=7.9555[/math]

[math]\ddot{a}_{60: 20}=12.3816[/math]

Annual level amount [math]=\frac{40+5 \ddot{a}_{60: \overline{101}}+5 \ddot{a}_{60: 20 \mid}}{\ddot{a}_{60}}=\frac{141.686}{14.9041}=9.51[/math]

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