Interest: 5% per year effective

Exercise 7.9 A whole life insurance with sum insured $100 000 is issued to a select life aged 35. Premiums are payable annually in advance and the death benefit is payable at the end of the year of death. The premium is calculated using the Standard Select Survival Model, and assuming Initial Expenses: 40% of the gross premium plus $125 Renewal expenses: 5% of gross premiums plus $40, due at the start of each policy year from the second onwards a) Calculate the Net Premium Policy Valuation at t=10 b) Calculate the Full Preliminary Term Reserve at t=10 c) Calculate the CRVM Reserve t=10 d) Calculate the Gross Premium Valuation Reserve at t=10 e) Show that GPPV at t=10 is the same as NPPV at t=10 plus Deferred Acquisition Cost at t=10 i.e. Show that VG . +10 VN = VE 10 10 Exercise 7.9 A whole life insurance with sum insured $100 000 is issued to a select life aged 35. Premiums are payable annually in advance and the death benefit is payable at the end of the year of death. The premium is calculated using the Standard Select Survival Model, and assuming Initial Expenses: 40% of the gross premium plus $125 Renewal expenses: 5% of gross premiums plus $40, due at the start of each policy year from the second onwards a) Calculate the Net Premium Policy Valuation at t=10 b) Calculate the Full Preliminary Term Reserve at t=10 c) Calculate the CRVM Reserve t=10 d) Calculate the Gross Premium Valuation Reserve at t=10 e) Show that GPPV at t=10 is the same as NPPV at t=10 plus Deferred Acquisition Cost at t=10 i.e. Show that VG . +10 VN = VE 10 10