Question 5 (18 marks) Assume that you are asked to explain how premiums in a life insurance policy are calculated. The annual discount rate is 5%. Based on the following information, answer the questions below. Number living Age at beginning Of year at beginning of designated year The Hong Kong Polytechnic Univ number dying during designated year 28 9,612,750 16,342 23 29 9,596,408 16,410 30 9,579,998 16,573 31 9,563,425 17,023 32 9,546,402 17,470 33 9,528,932 18,200 34 9,510,732 19,021 35 9,491,711 20.028 a) Compute the net single premium for a one-year term insurance policy in the amount of $1,000 insured at age 28. (2 marks) b) Compute the net single premium for a five-year term insurance policy in the amount of $1,000 insured at age 28. (4 marks) c) Compute the net annual level premium for the same policy as in part (b). (5 marks) d) What are the assumptions of the net single premium? (3 marks) e) What is the legal reserve in a life insurance policy and what are the purposes of the legal reserve? (4 marks)