6. (13 Marks) For a whole life insurance issued to (35), the death benefit, which is payable at the end of the year of death, is $50,000 in the first 20 years, and $100,000 thereafter. Level annual premiums are payable for 20 years or until earlier death. The gross premium is determined using the following premium basis Survival model: Standard Ultimate Survival Model; Interest: 5% per year effective Initial Expenses: 40% of the gross premium plus $125; Renewal Expenses: 5% of the gross premium plus 840, due at the start of each policy year from the second onwards (*) (3 marks) Calculate the gross annual premium. (b) (3 marks) Calculate the policy value 5 years after issue using the gross premium policy value basis (c) (4 marks) Calculate the policy value 5 years after issue using the net premium policy value (d) (3 marks) What is the definition of policy value? Explain why a policy value basis may dities from the premium basis. 7. (14 Marks) Considera 20 6. (13 Marks) For a whole life insurance issued to (35), the death benefit, which is payable at the end of the year of death, is $50,000 in the first 20 years, and $100,000 thereafter. Level annual premiums are payable for 20 years or until earlier death. The gross premium is determined using the following premium basis Survival model: Standard Ultimate Survival Model; Interest: 5% per year effective Initial Expenses: 40% of the gross premium plus $125; Renewal Expenses: 5% of the gross premium plus 840, due at the start of each policy year from the second onwards (*) (3 marks) Calculate the gross annual premium. (b) (3 marks) Calculate the policy value 5 years after issue using the gross premium policy value basis (c) (4 marks) Calculate the policy value 5 years after issue using the net premium policy value (d) (3 marks) What is the definition of policy value? Explain why a policy value basis may dities from the premium basis. 7. (14 Marks) Considera 20