An annual premium conventional with-profits endowment assurance policy is issued to a life aged 35. The initial
Question:
An annual premium conventional with-profits endowment assurance policy is issued to a life aged 35. The initial sum assured is 50,000, the gross premium is 1,500 and the term of the policy is 25 years. The death benefit of the sum assured and attaching bonuses is payable at the end of the year of death. The office declares compound reversionary bonuses, vesting at the end of each policy year. Given that bonuses of 3% pa have been declared for each year of the contract so far, calculate the prospective gross premium reserve at the end of the fifth policy year.
Basis:
Future bonuses of 1.92308% pa compound
AM92 Ultimate mortality 6% pa interest
Renewal expenses of 5% of each premium
Claim expenses of 350
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill