A life insurance company issues a 10-year term assurance policy to a life aged [50], with...

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A life insurance company issues a 10-year term assurance policy to a life aged [50], with sum insured £100,000. Level premiums are paid monthly in advance throughout the term. The interest rate is 5% p.a and assume UDD. You may use that, ä (m) är - (m-1) 2m (i) Show that, ..(m) (m-1) ≈är:n (1-v" nPx). x:n 2m (ii) Calculate the monthly gross premium allowing for initial expenses of E₁ = £100, re- newal expenses of 20% of each premium payment in the first year, renewal expenses of 5% of each premium payments after the first year, and claim expenses of £E₂ = 250. Assume the sum insured and claim expenses are paid at the end of the month of death. To approximate the value for A(m)1 use your answer to part (i). 50:10 ä ;(m) 50:10 use claims acceleration and to approximate 10 A life insurance company issues a 10-year term assurance policy to a life aged [50], with sum insured £100,000. Level premiums are paid monthly in advance throughout the term. The interest rate is 5% p.a and assume UDD. You may use that, ä (m) är - (m-1) 2m (i) Show that, ..(m) (m-1) ≈är:n (1-v" nPx). x:n 2m (ii) Calculate the monthly gross premium allowing for initial expenses of E₁ = £100, re- newal expenses of 20% of each premium payment in the first year, renewal expenses of 5% of each premium payments after the first year, and claim expenses of £E₂ = 250. Assume the sum insured and claim expenses are paid at the end of the month of death. To approximate the value for A(m)1 use your answer to part (i). 50:10 ä ;(m) 50:10 use claims acceleration and to approximate 10

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i Using the UDD formula m m1 1 vnpx Where m is the probability ... View the full answer