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Unformatted text preview: Practice Questions 3 ACTSC 331, FALL 2011 1. In a fully continuous whole life insurance on (50), premiums are charged continuously at an annual rate of 200. A death benefit of b will be paid at the time of death. Assume that mortality follows De Moivres law with l x = 90 x and the rate of interest is 5%. (a) Calculate b by the equivalence principle. (b) Calculate the benefit reserve at the end of the 15th policy year. (c) Let 15 L be the prospective loss function at the end of the 15th policy year, given that (50) is still alive then. Calculate V ar ( 15 L  T 50 > 15). 2. Consider a 20Payment years, 30year endowment insurance on (40). In this insurance, a death benefit of 1500 is payable at the time of death if death occurs during the 30 year period. A maturity value of 1000 will be paid if (40) is still alive at the end of the 30year term. Premiums are charged continuously at an annual rate of as long as (40) survives during the 20year period....
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 Fall '09
 david

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