[10 marks] Fred, (60) has purchased a Universal Life policy with increasing death benefits. The face amount is $100,000 and the death benefit is the face amount plus account value. 1. The credited rate is 4.8% (and applicable for discounting) and the account value after 23 months is $35,000. Going forward Fred is paying $200 per month and is required to pay a 15% premium charge plus $30 in expense charges plus a COl charge based on a rate of $3.00 per thousand. There is a flat surrender charge of $500. At the end of month 24 Fred surrenders the policy. He uses the cash surrender value to buy a single premium whole life annuity due whose 1st 10 annual payments are guaranteed. Assuming mortality is according to the Standard Ultimate Table (as provided in appendix D) and 5% interest and the annuity is priced using the equivalence principle on a net basis, calculate the amount of the annual annuity benefit amount. [10 marks] Fred, (60) has purchased a Universal Life policy with increasing death benefits. The face amount is $100,000 and the death benefit is the face amount plus account value. 1. The credited rate is 4.8% (and applicable for discounting) and the account value after 23 months is $35,000. Going forward Fred is paying $200 per month and is required to pay a 15% premium charge plus $30 in expense charges plus a COl charge based on a rate of $3.00 per thousand. There is a flat surrender charge of $500. At the end of month 24 Fred surrenders the policy. He uses the cash surrender value to buy a single premium whole life annuity due whose 1st 10 annual payments are guaranteed. Assuming mortality is according to the Standard Ultimate Table (as provided in appendix D) and 5% interest and the annuity is priced using the equivalence principle on a net basis, calculate the amount of the annual annuity benefit amount