Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Public Finance

Authors: Richard W. Tresch

4th Edition

0128228644, 978-0128228647

More Books

Students also viewed these Finance questions