Life Insurance

Consider the following life table to which belongs to.

Age Number of Persons Alive

60 1000

70 800

80 500

90 100

100 0

Assumption

a.The death benefit is $1,000,000.

b.The interest rate is 5% for every 10-year period.

c.The death benefit is paid at the end of period of death.

d.Insurance premiums are paid at the beginning of each period.

(a)What is the probability that Peter will die between age 70 and 90?

(b)Suppose Peter who is aged 60 purchases a whole life insurance policy with death benefit $1,000,000.Determine the annual level-premiums with the first premium due at age 60.(round to the nearest figure).

(c)If Peter decides to surrender his policy at age 80, how much can he receive from his insurance policy?