T5-232-2010W - ACTSC 232 WINTER 2010 Tutorial 5 3:30-4:20...

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ACTSC 232, WINTER 2010 Tutorial 5 – 3:30-4:20, 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 10-year 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 10-year 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 , t 0. Calculate P .
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