On 1 January 1999, an insurance company issued a without profit whole life policy to a life aged 45 exact. The sum assured on the policy is 125.000 which is payable at the end of the year of death. Level premiums are payable annually in advance to age 65 or until earlier death. The company calculated the premium on the following basis: Mortality: AM92 Select Interest: 6% per annum Initial expenses: 75% of the first year's premium, incurred at outset Renewal expenses 5% of the second and each subsequent year's premium, incurred at the beginning of the respective policy years Claims expense: 325 payable at the end of the year of death ( Show that the annual premium is approximately 1.883. 141 On 31 December 2013, immediately before the premium then due, the life wishes to surrender the policy. The insurance company calculates a surrender value equal to the gross prospective policy reserve, using the following basis: Mortality: AM92 Ultimate Interest: 6% per annum Expenses: Ignore (i) Calculate the surrender value payable by the insurance company. (3) [Total 7)