Math 472 Spring 2011 Chapter 15 Lecture Examples

# Math 472 Spring 2011 Chapter 15 Lecture Examples - MATH...

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MATH 472/567: Actuarial Theory II/Topics in Actuarial Theory I Chapter 15: Lecture Examples 1. For a 10-payment, fully discrete 20-year term insurance of 1000 on (40): (i) Mortality follows the Illustrative Life Table, and i = 0.06 (ii) The following expenses, all payable at the beginning of the year: Year 1 Years 2+ % Premium Per Policy % Premium Per Policy Taxes 4% 4% Sales Commission 25% 5% Policy Maintenance 10 5 Calculate the expense-loaded premium using the equivalence principle. 1

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2. For a fully discrete whole life insurance of 10,000 on (30): (i) Mortality follows the Illustrative Life Table. (ii) i = 0.06 (iii) Percent of premium expenses are 15% in each year, incurred at the begin- ning of the year. (iv) Per policy expenses include 100 at policy issue, 30 at the beginning of each year that the policy is in-force, and 50 payable at the end of the year of death. Using the equivalence principle, calculate: (a) The annual level gross premium.
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