Question
Consider a 35-year term insurance issued to a life aged 35 with annual premiums, with sum insured $700,000 payable at the end of the year
Consider a 35-year term insurance issued to a life aged 35 with annual premiums, with sum insured $700,000 payable at the end of the year of death.
Write down an expression for the future loss random variable. i=5%
Because of the difficulty in writing math, K stands for K35 the kurtate life function for a person aged 35.
a. | L=700000 (1.05)-(K+1)-P (1.05/.05) [ 1 - (1.05)-(K+1) ] | |
b. | L=700000 (1.05)-(K+1) I[K<35]- P (1.05/.05) [ 1 - (1.05)-min(K+1, 35) ] | |
c. | L=700000 (1.05)-min(35,K+1)-P (1.05/.05) [ 1 - (1.05)-min(K+1, 35) ] | |
d. | L=700000 (1.05)-K-P (1.05/.05) [ 1 - (1.05)-K ] |
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