For a fully discrete 10-payment whole life policy of 10,000 on (x), you are given: ...

Transcribed Image Text:

For a fully discrete 10-payment whole life policy of 10,000 on (x), you are given: • Annual gross premium determined based on equivalence principle is 500. • Expenses, incurred at the start of each year, is k plus 20% of premium in the first year and 10 plus 4% of premium in the renewal years. • There is a settlement expense of 50 in case of death. An additional cost of 0.5 per 1000 is incurred at the start of every year. •ä = 13.8, är+5 = 12.3, ä:10 = 7.276, ä +5:5 = 5.293. • d = 0.05. (a) Determine k. (b) Calculate the total reserve at the end of year 5. (12 marks) (8 marks) For a fully discrete 10-payment whole life policy of 10,000 on (x), you are given: • Annual gross premium determined based on equivalence principle is 500. • Expenses, incurred at the start of each year, is k plus 20% of premium in the first year and 10 plus 4% of premium in the renewal years. • There is a settlement expense of 50 in case of death. An additional cost of 0.5 per 1000 is incurred at the start of every year. •ä = 13.8, är+5 = 12.3, ä:10 = 7.276, ä +5:5 = 5.293. • d = 0.05. (a) Determine k. (b) Calculate the total reserve at the end of year 5. (12 marks) (8 marks)

Answer rating: 100% (QA)

Let me break this down stepbystep a To determine k Given Expenses in first year k 20 of pre... View the full answer