A person aged 30 takes out a special Whole Life policy with the following: Sum insured...

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A person aged 30 takes out a special Whole Life policy with the following: Sum insured of $2,000,000 payable at the end of the year of death. A life annuity of $200,000 per annum payable annually in arrears. Use the Equivalence Principle to calculate the premium payable annually in advance. At the end of the tenth year - after receiving the 10th annuity payment due then- the policy holder decides to change the policy to a special 25-year Endowment, with the following: Sum insured of $800,000 Annuity of $80,000 per year, terminating at the end of 20 years measured from the outset or on earlier death. Calculate: a) the new annual premiums which will be payable in advance for the next 15 years or until earlier death; b) the reserve on the altered policy at the end of the 24th year, assuming it will still be in force then. Assume: Mortality = Tables Interest = 6% Expenses = 0 A person aged 30 takes out a special Whole Life policy with the following: Sum insured of $2,000,000 payable at the end of the year of death. A life annuity of $200,000 per annum payable annually in arrears. Use the Equivalence Principle to calculate the premium payable annually in advance. At the end of the tenth year - after receiving the 10th annuity payment due then- the policy holder decides to change the policy to a special 25-year Endowment, with the following: Sum insured of $800,000 Annuity of $80,000 per year, terminating at the end of 20 years measured from the outset or on earlier death. Calculate: a) the new annual premiums which will be payable in advance for the next 15 years or until earlier death; b) the reserve on the altered policy at the end of the 24th year, assuming it will still be in force then. Assume: Mortality = Tables Interest = 6% Expenses = 0

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a The new annual premiums payable in advance for the next 15 years or until earlier death can be cal... View the full answer