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Table_6_2_1 - Table 6.2.1 is worth some discussion[Part of...

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Unformatted text preview: Table 6.2.1 is worth some discussion. [Part of Table 6.2.1, Page 173 of Bowers et a1.) Fully Continuous Benefit Premiums Loss Components Premium Formula ‘15 z E b'rtrr Plan bT'U‘T Y 1 ‘ _ _ _ Whoehfe T _ P(AI): 1—4} insurance 1 1;! arm 0: “rt—Year term 1 NT Err-I, T S n fihil. ) = fé-‘jfl insurance 0 am?" > n ”m “2:751 n-Year T _ _ T < _ _ endowment 1 v“ ET’ — n. PMI a) = fl - 1 "U afil, T > 11. “I m insurance h-Payment r _ - 1 ’U afi] T S h’ — --— K whole hie 1 UT Em, T > h hPLAz) _ 3am mani'anoe hrPayment, 11—year 1 UT 5?]. T S h __ If endowment 1 ”UT iii], 1': < T g n hP(Zz:fij) = EL; insurance 1 v" E T > n 2‘ 3|, - A n-Year pure 0 n Efi‘T g n F(A 1) = “an; endowment 1 1; 0,3,1" :> n $51 “in?“ Column 1 is pretty self~explanatory= the name of the type of insarance and payment plan (more on the payment plans in a minute). Column 2 shows the present value of the benefit that will be paid, and Column 3 shows the present value of the premiums that will pay for the benefits. Finally, the most important column is Column 4, which shows the formula and notation for the benefit premium. You want to be able to cover up Column 4 and reproduce it quickly looking only at Column 1. Notice that all of the premiums follow the same general scheme; only the forms of the annuity and the death benefit change. The most important payment scheme shown is the one having it payments. For these plans, the insured pays premiums for the first In years that the insurance is in force, at which point the insinance is “paid up” and continues in force for the rest of the coverage period without further premiums. ...
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