For a fully discrete whole life insurance of 100000 to a life aged (50), you are...

  

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For a fully discrete whole life insurance of 100000 to a life aged (50), you are given • The commission is 50% of the first premium and 10% of each subsequent premium. • Mortality follows the Standard Select Model. • i = 0.05 (a) (3 points) Write down an expression for Lo, in terms of K50, the gross premium, P, and v. (b) (2 points) Calculate the gross annual premium using the equivalence principle. (c) [EXTRA CREDIT] (3 points) Calculate the probability that the insurance company makes a profit on this policy. For a fully discrete whole life insurance of 100000 to a life aged (50), you are given • The commission is 50% of the first premium and 10% of each subsequent premium. • Mortality follows the Standard Select Model. • i = 0.05 (a) (3 points) Write down an expression for Lo, in terms of K50, the gross premium, P, and v. (b) (2 points) Calculate the gross annual premium using the equivalence principle. (c) [EXTRA CREDIT] (3 points) Calculate the probability that the insurance company makes a profit on this policy.

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SOLUTION GIVEN INFORMATION a to is the gross loss So ... View the full answer