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6 1.
(ii) Contract premiums of 1600 are payable annually at the beginning of each year for 10 years.
(iii) i = 0.05
(iv) L is the loss random variable at the time of issue. Calculate the minimum value of L as a function of the time of death of
Pat.
Page 61 of 100
Examples
62.
Company ABC sets the contract premium for a continuous life a m i t y of 1 per year on (x) equal to the single benefit premium calculated using:
(i) 6 = 0.03
(ii) p,(t) = 0.02,
t2
However, a revised mortality assumption reflects future mortality improvement and is given by
Calculate the expected loss at issue for ABC (using the revised mortality assumption) as a percentage of the contract premium.
Page 62 of 100
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Examples
63.
For a special fully discrete 30-payment whole life insurance on (45), you are given: (i) The death benefit of 1000 is payable at the end of the year of death. (ii) The benefit premium for this insurance is equal to 1000P45 the for fust 15 years followed by an increased level premium of rr for the remaining 15 years. (iii) Mortality follows the Illustrative Life Table. (iv) i=0.06 Calculate n.
Page 63 of 100
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l 3
Examples
64.
For a special fully discrete 2-year endowment insurance of 1000 on (x), you are given;
Page 64 of 100
53
Examples
65.
For a special hlly discrete 5-year deferred whole life insurance of 100,000 on (40), you are given;
(i) The death benefit during the 5-year deferral period is return of benefit premium paid without interest.
(ii) Annual benefit premiums are payable only during the deferral period.
(iii) Mortality follows the Illustrative Life Table.
(iv) z = 0.06
T== h
n ~ d
ymkikh
A -
E' 5 9s
11
c
& 95
Page 65 of 100
Examples
66.
For a special fully discrete whole life insurance of 1000 issued on the life of (75), increasing premiums, nk, are payable at time k, for k = 0,1,2,. .. You are given: (i) nk = n O ( l + i ) k (ii) Mortality follows DeMoivre's Law with (iii) i = 0.05 (iv) Premiums are calculated in accordance with the equivalence principle. Calculate n, .
A) 33
O = 105. I
pf7?,~.
iib&J
'
B) 36
7s "
30 4
fi -)APV (Seehefit( -
/OOO
A,,
1000~ 5
;e"p&. y2 --ul
Page 66 of 100
Examples
67.
For a fully discrete 3-year endowment insurance of 1000 on (x), you are given:
L (i) , is the prospective loss random variable at time k.
(ii) i = 0.10
Calculate ,L ,given that (x) dies in the second year after issue.
A) 540
q-2
fve*.lr'Lk~.a
Page 67 of 100
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Examples
68.
For a fully continuous whole life insurance of 1 on (30), you are given: (i) The force of mortality is 0.05 in the first 10 years and 0.08 thereafter. (ii)
s = 0.08
Page 68 of 100
Examples
69.
(ii) Level premiums are payable at the beginning of each year. (iii) Deaths are uniformly distributed over each year of age. (iv) i = 0.10
(vi)
=6
Calculate the lob year terminal benefit reserve for this insurance.
Page 69 of 100
Examples
70.
(i) i= 0.05
Page 70 of 100
Examples
7 1.
For a special fully discrete 2-year endowment insurance on (x): (i) The pure endowment is 2000. (ii) The death benefit for year k is (1000k) plus the benefit reserve at the end of year k, k = 1,2. (iii) n is the level annual benefit premium. (iv) i = 0.08
,v
1
I
'ioos
d0W
Page 7 1 of 100
Examples
72.
For a fully discrete 5-payment 10-year decreasing term insurance on (60), you are given:
..., 9
(ii) Level benefit premiums are payable for five years and equal 218.15 each
(iv) i = 0.06
Calculate ,v, the benefit reserve at the end of year 2.
Page 72 of 100
Examples
73.
For a fully discrete whole life insurance of 1000 on (45), you are given:
Calculate 1000,,V,, .
Page 73 of 100
Examples
74.
A) 0.78
B) 0.81
C) 0.84
I?) 0.87
E) 0.90
Page 74 of 100
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Examples
75.
(iii)
p:;;l = 0.002 11
(iv) P, = 0.01426 ,,
Calculate i.
A) 5.33%
fi
/?, -
px:~
f2 :3 d
,06676 -- A o a l I
,07166 - ~ o ~ l l i
Page 75 of 100
Examples
76.
I O O O A ; ~ .324.25 = ~~
a35:ij
= 8.735 1
15-
Page 76 of 100
Examples
77.
For a fully discrete 15-payment whole life insurance of 100,000 on (x) you are given:
(i) The expense-loaded level annual premium using the equivalence principle is 4669.95.
(ii) 100,00OA, = 5 1,481.97
(iv) d = 0.02913
(vii) Per policy expenses are Kin the fvst year and 5 in each year thereafter until death. Calculate K.
O x , w f i I C 4 d ~ G ~ tIl l~ ~I
Up ~ ~
h l ' a h-*
- YC~~,Y&*
Page 77 of 100
Examples
78.
For a fully discrete whole life insurance of 1000 on (60), you are given:
Renewal Years
6% 2
(ii) The level expense-loaded premium is 4 1.20. (iii) i = 0.05 Calculate the value of the expense augmented loss variable, L, ,if the insured dies in the 3" policy year.
Page 78 of 100
Examples
79.
For a filly discrete whole life insurance of 100,000 on (35) you are given:
Calculate the level annual expense-loaded premium using the equivalence principle.
& P .i!cvel
6 n 4 d
E~peare.kea:NllucC
P I P I ( I I ~ ~
Page 79 of 100
Examples
80.
For a fully discrete whole life insurance of 1000 on (SO), you are given: (i) The annual per policy expense is 1. (ii) There is an additional first year expense of 15. (iii) The claim settlement expense of 50 is payable when the claim is paid (iv) A expenses, except the claim settlement expense, are paid at the U beginning of the year. (v) Mortality follows De Moivre's Law with (vi) i = 0.05 Calculate the level expense-loaded premium using the equivalence
w = 100.
Page 80 of 100