Consider a whole life policy issued to [50] with death benefit payable at the end of the year of death. The amount of the benefit is $300,000 if death occurs before age 60, and is $200,000 if death occurs after age 60. Level annual premiums are to be paid for the first 20 years.

a) Calculate the annual net premium using the equivalence principle and the Standard Select Survival Model @ 5%.

b) Calculate the value of L0 , the present value of the loss random variable, if the insured dies during the first policy year.

c) Calculate the value of L0 if the insured dies at age 72.6.