ACTSC 232, WINTER 2010
Tutorial 5 – 3:304:20, Monday, March 22, HH 1101
Note that in the following questions, all premiums are determined by the equiv
alence principle unless stated otherwise.
1. A fully continuous whole life insurance of 1000 is issued to (60) and premiums are
charged continuously at an annual rate of
P
until (60) dies. Let
L
be the loss random
variable for the insurance. You are given
δ
= 0
.
03 and
S
0
(
x
) = (100

x
)
/
100
,
0
≤
x
≤
100.
(a) Determine
P
by the equivalence principle.
(b) Determine
P
so that Pr
{
L >
0
}
= 0
.
3
.
2. A fully discrete 10year endowment insurance is issued to (60). A level premium of
P
is
payable at the beginning of each year as long as (60) survives in the 10year term. The
insurance will pay 5000 at the end of the year of death if death occurs in the term. If
(60) is still alive at the end of the term, all premiums without interest will be returned
to (60) at the end of the term. You are given
δ
= 0
.
06 and
μ
60
(
t
) = 0
.
02
This is the end of the preview. Sign up
to
access the rest of the document.
This note was uploaded on 03/20/2011 for the course ACTSC 232 taught by Professor Matthewtill during the Summer '08 term at Waterloo.
 Summer '08
 MATTHEWTILL

Click to edit the document details