The premiums paid annually in advance, for a deferred annuity contract to a man aged 47,...
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The premiums paid annually in advance, for a deferred annuity contract to a man aged 47, are limited to 10 payments. The annuity benefit commences at the age of 60 exact and follow the benefit structure below: $5,000 paid annually in advance for 10 years certain (even if the policyholder dies before the age of 70) • $1,200 paid per month, at the end of each month from age 70 onwards until death . Assume mortality follows AM92 ultimate mortality with 6% p.a. interest rate. There is an initial premium expense of $100 and a renewal premium expense of $20. A benefit expense of $100 at the time of the first payment of the certain annuity (paid only once at age 60). (a) Evaluate the premium paid for this policy. (7 marks) (b) Find the net premium policy value when the person is aged 65 exact (end of the 18th year of the policy). Net premium basis is AM92 ultimate mortality with 4% p.a. interest rate. The premiums paid annually in advance, for a deferred annuity contract to a man aged 47, are limited to 10 payments. The annuity benefit commences at the age of 60 exact and follow the benefit structure below: $5,000 paid annually in advance for 10 years certain (even if the policyholder dies before the age of 70) • $1,200 paid per month, at the end of each month from age 70 onwards until death . Assume mortality follows AM92 ultimate mortality with 6% p.a. interest rate. There is an initial premium expense of $100 and a renewal premium expense of $20. A benefit expense of $100 at the time of the first payment of the certain annuity (paid only once at age 60). (a) Evaluate the premium paid for this policy. (7 marks) (b) Find the net premium policy value when the person is aged 65 exact (end of the 18th year of the policy). Net premium basis is AM92 ultimate mortality with 4% p.a. interest rate.
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Answer To evaluate the premium paid for this policy we need to calculate the present value of the future premiums ... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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