Mortality Rates

AM92 AM92
Age q[x] q[x-1]+1 qx Age x l[x] l[x-1]+1
17 0.000427 0.000600 17 9,997.8091
18 0.000426 0.000548 0.000594 18 9,991.8904 9,993.5400
19 0.000425 0.000544 0.000587 19 9,986.0351 9,987.6338
20 0.000425 0.000541 0.000582 20 9,980.2432 9,981.7911
21 0.000425 0.000538 0.000577 21 9,974.5046 9,976.0016
22 0.000427 0.000535 0.000572 22 9,968.8391 9,970.2654
23 0.000429 0.000534 0.000569 23 9,963.1967 9,964.5824
24 0.000431 0.000533 0.000567 24 9,957.5775 9,958.9225
25 0.000435 0.000533 0.000566 25 9,951.9913 9,953.2858
26 0.000440 0.000535 0.000567 26 9,946.3982 9,947.6622
27 0.000447 0.000538 0.000570 27 9,940.7984 9,942.0218
28 0.000455 0.000542 0.000574 28 9,935.1818 9,936.3549
29 0.000465 0.000549 0.000580 29 9,929.5088 9,930.6613
30 0.000476 0.000558 0.000590 30 9,923.7497 9,924.8916
31 0.000490 0.000569 0.000602 31 9,917.9145 9,919.0260
32 0.000507 0.000584 0.000617 32 9,911.9538 9,913.0547
33 0.000527 0.000602 0.000636 33 9,905.8282 9,906.9285
34 0.000550 0.000624 0.000660 34 9,899.4984 9,900.6078
35 0.000577 0.000651 0.000689 35 9,892.9151 9,894.0536
36 0.000608 0.000683 0.000724 36 9,886.0395 9,887.2069
37 0.000644 0.000722 0.000765 37 9,878.8128 9,880.0288
38 0.000685 0.000768 0.000813 38 9,871.1665 9,872.4508
39 0.000733 0.000823 0.000870 39 9,863.0227 9,864.4047
40 0.000788 0.000887 0.000937 40 9,854.3036 9,855.7931
41 0.000851 0.000962 0.001014 41 9,844.9025 9,846.5384
42 0.000922 0.001049 0.001104 42 9,834.7030 9,836.5245
43 0.001003 0.001150 0.001208 43 9,823.5994 9,825.6354
44 0.001096 0.001267 0.001327 44 9,811.4473 9,813.7463
45 0.001201 0.001402 0.001465 45 9,798.0837 9,800.6939
46 0.001320 0.001557 0.001622 46 9,783.3371 9,786.3162
47 0.001455 0.001735 0.001802 47 9,766.9983 9,770.4231
48 0.001607 0.001938 0.002008 48 9,748.8603 9,752.7874
49 0.001778 0.002170 0.002241 49 9,728.6499 9,733.1938
50 0.001971 0.002434 0.002508 50 9,706.0977 9,711.3524
51 0.002189 0.002732 0.002809 51 9,680.8990 9,686.9669
52 0.002433 0.003070 0.003152 52 9,652.6965 9,659.7075
53 0.002707 0.003452 0.003539 53 9,621.1006 9,629.2115
54 0.003014 0.003881 0.003976 54 9,585.6916 9,595.0563
55 0.003358 0.004363 0.004469 55 9,545.9929 9,556.8003
56 0.003742 0.004903 0.005025 56 9,501.4839 9,513.9375
57 0.004171 0.005507 0.005650 57 9,451.5938 9,465.9293
58 0.004649 0.006180 0.006352 58 9,395.6971 9,412.1712
59 0.005182 0.006929 0.007140 59 9,333.1284 9,352.0165
60 0.005774 0.007760 0.008022 60 9,263.1422 9,284.7641
61 0.006433 0.008680 0.009009 61 9,184.9687 9,209.6568
 62 0.007164 0.009696 0.010112 62 9,097.7405 9,125.8818
63 0.007974 0.010815 0.011344 63 9,000.5884 9,032.5642
64 0.008871 0.012046 0.012716 64 8,892.5741 8,928.8177
65 0.009864 0.013396 0.014243 65 8,772.7359 8,813.6881
66 0.010960 0.014873 0.015940 66 8,640.0481 8,686.2016
67 0.012169 0.016484 0.017824 67 8,493.5187 8,545.3532
68 0.013502 0.018239 0.019913 68 8,332.1396 8,390.1611
69 0.014969 0.020145 0.022226 69 8,154.9318 8,219.6390
70 0.016582 0.022210 0.024783 70 7,960.9776 8,032.8606
71 0.018353 0.024441 0.027606 71 7,749.4659 7,828.9686
72 0.020296 0.026847 0.030718 72 7,519.7027 7,607.2400
73 0.022423 0.029434 0.034144 73 7,271.1461 7,367.0828
74 0.024750 0.032208 0.037911 74 7,003.5216 7,108.1052
75 0.027293 0.035176 0.042046 75 6,716.8231 6,830.1844
76 0.030067 0.038344 0.046578 76 6,411.3459 6,533.5008
77 0.033090 0.041715 0.051538 77 6,087.8084 6,218.5759
78 0.036379 0.045292 0.056956 78 5,747.3624 5,886.3628
79 0.039954 0.049080 0.062867 79 5,391.6400 5,538.2791
80 0.043833 0.053078 0.069303 80 5,022.7931 5,176.2224
81 0.048037 0.057288 0.076300 81 4,643.5129 4,802.6290
82 0.052586 0.061709 0.083893 82 4,257.0056 4,420.4525
83 0.057501 0.066337 0.092117 83 3,866.9884 4,033.1467
84 0.062804 0.071169 0.101007 84 3,477.5929 3,644.6327
85 0.068516 0.076199 0.110600 85 3,093.2863 3,259.1862
86 0.074661 0.081422 0.120929 86 2,718.7128 2,881.3467
87 0.081258 0.086827 0.132028 87 2,358.5299 2,515.7310
88 0.088331 0.092405 0.143929 88 2,017.2298 2,166.8805
89 0.095902 0.098144 0.156660 89 1,698.9089 1,839.0458
90 0.103990 0.104031 0.170247 90 1,407.0550 1,535.9801
91 0.110052 0.184714 91 1,260.7354
92 0.200079 92
93 0.216354 93
94 0.233548 94
95 0.251662 95
96 0.270688 96
97 0.290613 97
98 0.311414 98
99 0.333058 99
100 0.355505 100
101 0.378702 101
102 0.402588 102
103 0.427090 103
104 0.452127 104
105 0.477608 105
106 0.503432 106
107 0.529493 107
108 0.555674 108
109 0.581857 109
110 0.607918 110
111 0.633731 111
112 0.659171 112
113 0.684114 113
114 0.708442 114
115 0.732042 115
116 0.754809 116
117 0.776648 117
118 0.797477 118
119 0.817225 119
120 1.000000 120
 lx d[x] d[x-1]+1 dx Age x
10,000.0000 4.2691 6.0000 17
9,994.0000 4.2566 5.4764 5.9364 18
9,988.0636 4.2440 5.4332 5.8630 19
9,982.2006 4.2416 5.4002 5.8096 20
9,976.3909 4.2392 5.3670 5.7564 21
9,970.6346 4.2567 5.3341 5.7032 22
9,964.9313 4.2742 5.3211 5.6700 23
9,959.2613 4.2917 5.3081 5.6469 24
9,953.6144 4.3291 5.3051 5.6337 25
9,947.9807 4.3764 5.3220 5.6405 26
9,942.3402 4.4435 5.3488 5.6671 27
9,936.6730 4.5205 5.3855 5.7037 28
9,930.9694 4.6172 5.4519 5.7600 29
9,925.2094 4.7237 5.5381 5.8559 30
9,919.3535 4.8598 5.6439 5.9715 31
9,913.3821 5.0253 5.7892 6.1166 32
9,907.2655 5.2204 5.9640 6.3010 33
9,900.9645 5.4448 6.1779 6.5346 34
9,894.4299 5.7082 6.4410 6.8173 35
9,887.6126 6.0107 6.7529 7.1586 36
9,880.4540 6.3620 7.1334 7.5585 37
9,872.8954 6.7618 7.5820 8.0267 38
9,864.8688 7.2296 8.1184 8.5824 39
9,856.2863 7.7652 8.7421 9.2353 40
9,847.0510 8.3780 9.4723 9.9849 41
9,837.0661 9.0676 10.3185 10.8601 42
9,826.2060 9.8531 11.2995 11.8701 43
9,814.3359 10.7534 12.4340 13.0236 44
9,801.3123 11.7675 13.7405 14.3589 45
9,786.9534 12.9140 15.2373 15.8744 46
9,771.0789 14.2109 16.9517 17.6075 47
9,753.4714 15.6665 18.9009 19.5850 48
9,733.8865 17.2975 21.1210 21.8136 49
9,712.0728 19.1308 23.6375 24.3579 50
9,687.7149 21.1915 26.4648 27.2128 51
9,660.5021 23.4850 29.6553 30.4499 52
9,630.0522 26.0443 33.2400 34.0808 53
9,595.9715 28.8913 37.2384 38.1536 54
9,557.8179 32.0554 41.6963 42.7139 55
9,515.1040 35.5546 46.6469 47.8134 56
9,467.2906 39.4226 52.1289 53.4902 57
9,413.8004 43.6806 58.1672 59.7965 58
9,354.0040 48.3643 64.8001 66.7876 59
9,287.2164 53.4854 72.0498 74.5020 60
9,212.7143 59.0869 79.9398 82.9973 61
9,129.7170 65.1763 88.4845 92.3197 62
9,037.3973 71.7707 97.6871 102.5202 63
8,934.8771 78.8860 107.5565 113.6159 64
8,821.2612 86.5343 118.0682 125.6412 65
8,695.6199 94.6949 129.1898 138.6082 66
8,557.0118 103.3576 140.8616 152.5202 67
8,404.4916 112.5006 153.0282 167.3586 68
8,237.1329 122.0712 165.5846 183.0785 69
8,054.0544 132.0090 178.4098 199.6036 70
7,854.4508 142.2259 191.3478 216.8300 71
7,637.6208 152.6199 204.2316 234.6124 72
7,403.0084 163.0409 216.8427 252.7683 73
7,150.2401 173.3372 228.9379 271.0728 74
6,879.1673 183.3223 240.2586 289.2415 75
6,589.9258 192.7700 250.5205 306.9456 76
6,282.9803 201.4456 259.4079 323.8122 77
5,959.1680 209.0833 266.6051 339.4104 78
5,619.7577 215.4176 271.8187 353.2973 79
5,266.4604 220.1641 274.7435 364.9815 80
4,901.4789 223.0604 275.1330 373.9828 81
4,527.4960 223.8589 272.7817 379.8252 82
4,147.6708 222.3557 267.5469 382.0710 83
3,765.5998 218.4067 259.3848 380.3519 84
3,385.2479 211.9396 248.3467 374.4084 85
3,010.8395 202.9818 234.6051 364.0978 86
2,646.7416 191.6494 218.4334 349.4440 87
2,297.2976 178.1840 200.2306 330.6478 88
1,966.6499 162.9288 180.4913 308.0954 89
1,658.5545 146.3196 159.7895 282.3639 90
1,376.1906 138.7465 254.2017 91
1,121.9889 224.4864 92
897.5025 194.1783 93
703.3242 164.2600 94
539.0643 135.6620 95
403.4023 109.1962 96
294.2061 85.5001 97
208.7060 64.9940 98
143.7120 47.8644 99
95.8476 34.0743 100
61.7733 23.3937 101
38.3796 15.4512 102
22.9284 9.7925 103
13.1359 5.9391 104
7.1968 3.4373 105
3.7596 1.8927 106
1.8669 0.9885 107
0.8784 0.4881 108
0.3903 0.2271 109
0.1632 0.0992 110
0.0640 0.0405 111
0.0234 0.0154 112
0.0080 0.0055 113
0.0025 0.0018 114
0.0007 0.0005 115
0.0002 0.0001 116
0.0000 0.0000 117
0.0000 0.0000 118
0.0000 0.0000 119
0.0000 0.0000 120
(i) Expected end-year cashflows per policy in force at start of year
i 3.00% Interest rate S 10,000 Sum assured
IE 150 initial expenses
IC 20.00% Initial commission
re 25 Renewal expenses
P 1,000 Premium

At start of year: At end of year: Death

Policy Mortality benefit and
year Premium Expenses Commission Interest probability expense
1 1000 150.00 200.00 19.50 0.001971 10,408.00
2 1,000 25.50 15.00 28.79 0.002732 10,416.16
3 1,000 26.01 15.00 28.77 0.003152 10,424.48
4 1,000 26.53 15.00 28.75 0.003539 10,432.97
5 1,000 27.06 15.00 28.74 0.003976 10,441.63
6 1,000 27.60 15.00 28.72 0.004469 10,450.46
7 1,000 28.15 15.00 28.71 0.005025 10,459.47
8 1,000 28.72 15.00 28.69 0.005650 10,468.66
9 1,000 29.29 15.00 28.67 0.006352 10,478.04
10 1000 29.88 15.00 28.65 0.007140 10,487.60
 rc_ 1.50% Renewal commission
tial expenses ced 400 Claim expenses on death
tial commission cem 200 Claim expenses on maturity
newal expenses f 2.00% Expenses inflation

Expected Maturity Expected

death Survival benefit and maturity Expected
cost probability expense cost cashflow
20.51 0.998029 0.00 648.99
28.46 0.997268 0.00 959.83
32.86 0.996848 0.00 954.90
36.92 0.996461 0.00 950.30
41.52 0.996024 0.00 945.16
46.70 0.995531 0.00 939.42
52.56 0.994975 0.00 932.99
59.15 0.994350 0.00 925.82
66.56 0.993648 0.00 917.82
74.88 0.992860 10,243.80 10,170.66 -9,261.76
(ii) Expected end-year cashflows per policy at outset
i 3.00% Interest rate S 10,000 Sum assured
IE 150 initial expenses
IC 20.00% Initial commission
re 25 Renewal expenses
P 1,000 Premium

At start of year: At end of year: Death

policy Mortality benefit and
year Premium Expenses Commission Interest probability expense
1 1000 150.00 200.00 19.50 0.001971 10,408.00
2 1,000 25.50 15.00 28.79 0.002732 10,416.16
3 1,000 26.01 15.00 28.77 0.003152 10,424.48
4 1,000 26.53 15.00 28.75 0.003539 10,432.97
5 1,000 27.06 15.00 28.74 0.003976 10,441.63
6 1,000 27.60 15.00 28.72 0.004469 10,450.46
7 1,000 28.15 15.00 28.71 0.005025 10,459.47
8 1,000 28.72 15.00 28.69 0.005650 10,468.66
9 1,000 29.29 15.00 28.67 0.006352 10,478.04
10 1000 29.88 15.00 28.65 0.007140 10,487.60
 rc_ 1.50% Renewal commission
tial expenses ced 400 Claim expenses on death
tial commission cem 200 Claim expenses on maturity
newal expenses f 2.00% Expenses inflation

Expected
cashflow
Expected Maturity Expected Probability per pol in
death Survival benefit and maturity Expected of surviving force at
cost probability expense cost cashflow to start of yr outset
20.51 0.998029 0.00 648.99 1.000000 648.99
28.46 0.997268 0.00 959.83 0.998029 957.94
32.86 0.996848 0.00 954.90 0.995302 950.42
36.92 0.996461 0.00 950.30 0.992165 942.86
41.52 0.996024 0.00 945.16 0.988654 934.44
46.70 0.995531 0.00 939.42 0.984723 925.07
52.56 0.994975 0.00 932.99 0.980322 914.63
59.15 0.994350 0.00 925.82 0.975396 903.04
66.56 0.993648 0.00 917.82 0.969885 890.18
74.88 0.992860 10,243.80 10,170.66 -9,261.76 0.963724 -8,925.79
(iii) Graph

Graphing Expected end-year cashflows per policy at o

2,000

0
Policy Expected
year cashflow
1 648.99 -2,000
2 957.94

Cashflow
3 950.42 -4,000
4 942.86
5 934.44 -6,000
6 925.07
7 914.63
-8,000
8 903.04
9 890.18
10 -8,925.79 -10,000
1 2 3 4 5 6 7

Policy year
cashflows per policy at outset

4 5 6 7 8 9 10

Policy year
Solutions

(i) Expected end-year cashflows per policy in force at start of year

Policy Expected
Year cashflow
1 648.99
2 959.83
3 954.90
4 950.30
5 945.16
6 939.42
7 932.99
8 925.82
9 917.82
10 -9,261.76

(ii) Expected end-year cashflows per policy at outset

Policy Expected
Year cashflow
1 648.99
2 957.94
3 950.42
4 942.86
5 934.44
6 925.07
7 914.63
8 903.04
9 890.18
10 -8,925.79

(iii) Graph

Expected end-year cashflows per policy at outset

2,000

-2,000
Cashflow

-4,000

-6,000

-8,000
 Cashflow
-4,000

-6,000

-8,000

-10,000
1 2 3 4 5 6 7 8 9

Policy year

The expected cashflows increase from Year 1 to Year 2, are broadly level over Years 2 to 9 (though they do decline slightly)
The lower expected cashflow in Year 1 is a result of the much higher levels of expenses and commission payable in that ye
The gradual decrease over Years 2-9 reflects the small increase in expected claim cost as the policyholder gets older and m
expenses due to inflation.
The large negative expected cashflow in Year 10 is a result of the very high expected cost of the maturity payments in that
until the maturity date, while the probability of having a death benefit paid before the end of the term is very small.

(iv) Main difficulty

The main problem with this pattern of expected cashflows for the insurance company is that a significant amount of addit
that arises in Year 10. If the financing is not available at the time that it is needed, then the insurance company will be un

The usual way of avoiding this problem is for the company to set aside money in the form of reserves during the policy te
cover the future negative cashflows with a high probability, with the aim of eliminating the need for any further additiona
insolvency occurring.
y at outset
 7 8 9 10

(though they do decline slightly), followed in Year 10 by a very large negative expected cashflow.
d commission payable in that year compared to subsequent years.
he policyholder gets older and mortality rates increase slightly, and is also due to the higher expected

f the maturity payments in that year, reflecting the very large probability of a policy staying in force
of the term is very small.

at a significant amount of additional financing is required to cover the very large expected shortfall
he insurance company will be unable to pay the maturity claim and may become insolvent.

of reserves during the policy term. The company will make sure that the reserves it holds are likely to
e need for any further additional financing at the end of the term, and so reducing the possibility of