2. You are a Pricing Actuary working for Gamma Life, a large life insurance company, selling a range of products through its own sales force. Gamma is considering launching a new conventional Term Assurance product, offering policyholders the option to increase the sum assured under their policy at any point during the term of the contract. If, during the term of the contract, a policyholder decides to take the option to increase their sum assured, the premium charged would increase in line with the sum assured. For example, if the sum assured were increased by 50%, the premium charged would also increase by 50%. Policyholders taking up this option would not need to undergo further underwriting, provided the new level of cover were no more than twice the original sum assured.Gamma's Pricing Actuary has proposed that if this product is launched in the market, then underwriting decisions and processes should be based on a sum assured of twice that specified by the policyholder. For example: a policyholder applying for a sum assured of $100,000 would be charged a premium rate consistent with a sum assured of $100,000, but would be underwritten as if they had applied for a sum assured of $200,000. c) Comment on the benefits and disadvantages of this proposal. Following launch of the new product, the Underwriting Manager has referred two applicants to you, both of whom have applied for cover for 20 years. Applicant 1: A 58-year-old female, sum assured of $25,000, proposal form shows applicant has suffered with high blood pressure and elevated cholesterol levels for the past 10 years. Applicant 2: A 22-year-old male, sum assured of $2,000,000, no health issues. d) Set out, with reasons, an appropriate underwriting strategy for each of these applicants