Question B1

Mrs. Chan purchased the HKMC Annuity plan at the age 69 for a s

ingle premium of

HK$1,000,000.

Below is the extract of guarantee monthly annuity payment table

(HK$) for male and female.

Female

(Single premium HK$1,000,000)

Age Last

Birthday at

Application

Guaranteed Monthly Annuity

Payment (The amount will be

determined at the outset and will

remain unchanged throughout the

whole of your life.)

Guaranteed

Period

Guaranteed cash value of

partial withdrawal after

receiving the 50

th

guaranteed

monthly annuity payment

65 HK$5,300 199 months HK$548,000

66 HK$5,400 195 months HK$552,000

67 HK$5,510 191 months HK$557,000

68 HK$5,620 187 months HK$561,000

69 HK$5,730 184 months HK$565,000

70 HK$5,840 180 months HK$568,000

Mrs. Chan wishes to partially surrender an amount of HK$150,000

after receiving the 50

th

guaranteed monthly annuity payment.

(a)

What are the guaranteed monthly annuity payment and number of g

uaranteed monthly

annuity payments provided by Mrs Chan's plan?

(2 marks)

(b)

What will be the reduction ratio and reduced guaranteed monthly

annuity payment after

the partial surrender? Show all your workings. Round your final

answer to integer.

(4 marks)

(c)

What will be the reduced guaranteed cash value at the point of

time after the partial

surrender and reduced lump sum death benefit value at the point

of time after the partial

surrender? Show all your workings. Round your final answer to i

nteger.