Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your company issues whole life annuities to a group of lives age 70 . For each policy, you are given: i. The annuity pays $2000
Your company issues whole life annuities to a group of lives age 70 . For each policy, you are given: i. The annuity pays $2000 at the end of each year. ii. The single gross premium is $26,600. iii. Profits are based on gross premium reserves. iv. The gross premium reserve at the end of year 10 is $8929.18 per policy. v. Expenses are paid at the end of each year for any policyholder who does not die during the year. During year 11 , anticipated and actual experience are as follows: 1000 such policies are in force at the beginning of year 11. For year 11 a) Provide a revised version of the recursive formula for calculating the policy value of the annuity described above. b) Calculate 11V. c) Calculate the total profit. d) Calculate the profit by source in the order mortality, interest, expenses. Your company issues whole life annuities to a group of lives age 70 . For each policy, you are given: i. The annuity pays $2000 at the end of each year. ii. The single gross premium is $26,600. iii. Profits are based on gross premium reserves. iv. The gross premium reserve at the end of year 10 is $8929.18 per policy. v. Expenses are paid at the end of each year for any policyholder who does not die during the year. During year 11 , anticipated and actual experience are as follows: 1000 such policies are in force at the beginning of year 11. For year 11 a) Provide a revised version of the recursive formula for calculating the policy value of the annuity described above. b) Calculate 11V. c) Calculate the total profit. d) Calculate the profit by source in the order mortality, interest, expenses
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started