A life insurance company issues 20-year critical illness term assurance policies. The benefits, payable during the policy term, are a lump sum of 50,000 payable immediately on diagnosis of a critical illness, or a benefit of 100,000 immediately on death if earlier. Premiums are payable monthly in advance during the term of the policy, ceasing on any claim. (i) Draw a transition state model for this policy labelling your diagram. A policy is issued to a life aged 45 exact, with an annual premium rate of 750. (ii) Calculate the value of the policy to the company. Basis: Mortality Critical Illness Force of Interest m = 0.004 for all x S=0.002 for all x d=4% throughout (2