1.

To calculate the value of an anticipated endowment for a person aged 25

Premium = Probability of survival x policy amount x present value (PV) of Rs.1.0
for the endowment period
PV = 600/ (1+0.05)5
= 600/1.2763
= 470.1089
0.981 x 600 x 0.4701 = Rs. 276.701
To find the net single premium on the basis of death for 5 years,
= total present value for the period/ first endowment amount
= Rs.470.1089/100
= Rs.4.701
Therefore, the total net single premium on the basis of death and survival will be 276.701+4.701
=Rs. 281.402

2. To calculate the net premium

Age

No. of persons living

No. of Deaths

Mortality rate per 1000

60

1000

20

20

61

980

22

22.45

62

958

25

26.11

63

933

33

35.37

64

900

40

44.44

65

860

45

52.33

If upon death the person is paid Rs. 1000, then the present value of the claim taken as premium
will be calculated as follows:
Present value = no. of deaths x amount claims and present value of Re. 1
The results for each year has been shown below
Year of

Age

No. Living

No. Deaths

Insurance

Amount of

Present

Present

claims per

value of Re

value of 4

death

x5 x 6

60

1000

20

1000

0.952

19040

61

980

22

1000

0.907

19954

62

958

25

1000

0.864

21600

63

933

33

1000

0.823

17259

64

900

40

1000

0.784

31360

65

860

45

1000

0.746

33570

Present value of all claims = Rs. 152,683.

Total premium to be charged in all 1000 policies = Rs. 152,683.00

Therefore, premium per policy = Rs.152.683.00