A 35-year old select life is wishing to purchase a 28-year endowment assurance product with the following benefit types: No benefits if death occurs before the age of 45. From the ages of 45 to 55 the death benefit is $275,000 which is paid at the end of the year of death. If the person dies after the age of 55 then he will receive a benefit of $500,000 at the end of the year of death. The survival benefit is $350,000. Premium for this policy is to be paid in advance at the start of each year, as long as the policyholder is alive, up to a maximum of 25 years. Premium basis: Assume select mortality Interest rate is assumed to be 6% p.a. effective Initial Expense of $500. Renewal expense of 2% each renewal premium Death benefit claim expense of $1,000 Policy Value basis: Assume non-select mortality Interest rate is assumed to be 4% p.a. effective Expenses are same as the Premium basis STAT 3037/6043: Life Contingencies Page 2 a. Evaluate the annual premium to be charged for this policy? b. What is the gross premium policy value for this policy at the end of the 15th year of the policy? A 35-year old select life is wishing to purchase a 28-year endowment assurance product with the following benefit types: No benefits if death occurs before the age of 45. From the ages of 45 to 55 the death benefit is $275,000 which is paid at the end of the year of death. If the person dies after the age of 55 then he will receive a benefit of $500,000 at the end of the year of death. The survival benefit is $350,000. Premium for this policy is to be paid in advance at the start of each year, as long as the policyholder is alive, up to a maximum of 25 years. Premium basis: Assume select mortality Interest rate is assumed to be 6% p.a. effective Initial Expense of $500. Renewal expense of 2% each renewal premium Death benefit claim expense of $1,000 Policy Value basis: Assume non-select mortality Interest rate is assumed to be 4% p.a. effective Expenses are same as the Premium basis STAT 3037/6043: Life Contingencies Page 2 a. Evaluate the annual premium to be charged for this policy? b. What is the gross premium policy value for this policy at the end of the 15th year of the policy