Suppose you are an actuarial consultant hired to determine life insurance premiums in the fictional country...

 

Transcribed Image Text:

Suppose you are an actuarial consultant hired to determine life insurance premiums in the fictional country of Zamunda. Owing to continuing warfare, the mortality rate in the country is extremely high. For all of the following calculations use the mortality table given below, assume the relevant discount rate is 4%. Mortality Table (Males) Number Number Deaths Age Alive 100,000 Dying per 1000 28 300 3.00 29 99,700 320 3.21 99,380 99,040 98,680 30 340 3.42 31 360 3.63 32 380 3.85 33 98,300 97,900 400 4.07 34 420 4.29 35 97,480 440 4.51 Present Value of $1 at 4% Year Factor 0.9615 0.9246 0.8890 4 0.8548 Required: a) Calculate the premium per $1,000 of coverage on a one-year term policy for a 30-year old male. Show all working. (3 marks) b) Calculate the net single premium per $1,000 of coverage on a three-year term policy for a 30-year old male. Show all working. (10 marks) c) Calculate the net level premium per $1,000 of coverage on a three-year term policy for a 30-year old male. Show all working. (7 marks) 1231 Suppose you are an actuarial consultant hired to determine life insurance premiums in the fictional country of Zamunda. Owing to continuing warfare, the mortality rate in the country is extremely high. For all of the following calculations use the mortality table given below, assume the relevant discount rate is 4%. Mortality Table (Males) Number Number Deaths Age Alive 100,000 Dying per 1000 28 300 3.00 29 99,700 320 3.21 99,380 99,040 98,680 30 340 3.42 31 360 3.63 32 380 3.85 33 98,300 97,900 400 4.07 34 420 4.29 35 97,480 440 4.51 Present Value of $1 at 4% Year Factor 0.9615 0.9246 0.8890 4 0.8548 Required: a) Calculate the premium per $1,000 of coverage on a one-year term policy for a 30-year old male. Show all working. (3 marks) b) Calculate the net single premium per $1,000 of coverage on a three-year term policy for a 30-year old male. Show all working. (10 marks) c) Calculate the net level premium per $1,000 of coverage on a three-year term policy for a 30-year old male. Show all working. (7 marks) 1231

Answer rating: 100% (QA)

ASSUMPTIONS TO BE TAKEN All claims will be paid at t... View the full answer