Question: 40. [Structural Question] You are given the following: (i) An insurer issues a 10-year deferred whole life annuity due with annual payments of 10,000

40. [Structural Question] You are given the following: (i) An insurer issues

40. [Structural Question] You are given the following: (i) An insurer issues a 10-year deferred whole life annuity due with annual payments of 10,000 to a life aged 50. (ii) The policy has a single premium which is determined from the equivalence principle. (iii) Mortality follows the Illustrative Life Table. (iv) i=0.06 (a) Calculate the net single premium. (b) Calculate the probability that present value of future profit is positive. (c) Repeat (b) if the premium charged is 1.1 times the single net premium.

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