288 14.

INSURANCE: RECURSIVE FORMULAS, VARYING INSURANCES

Table 14.1: Summary of Formulas in this Lesson

Recursive Formulas

Ax = vqx + VpxAx+l (14.1)

Ax = vqx + vZpx qx+l + vZzPxAx+z

Ax:m = vqx + VpxAX+l:n=Il (14.2)

A.l::m = vqx + v Px Ax.hn=Il (14.3)

nlAx = vPxn-lIAx+l (14.4)

Ax:fu = vPxAx+l:~

Increasing and Decreasing Insurance

(11.1)

(11.4)

(11.5)

(lA)x = -(J-l--=-:-5-)2 for constant force (14.5)

E[Zz]­ 2J-l for Z a continuously increasing contin­ (14.6)

- (J-l+25)3 uous insurance, constant force
(lAKm + WAJl::m = nA.Lm (14.7)

(IAKm + CDAKm = (n + l)Alm (14.8)

(IAKm + CDAKm = (n + l)Alm (14.9)

Recursive Formulas for Increasing and Decreasing Insurance

(IAKm =Alm + vPx(IA)X~l:n=Il (14.10)

(IAKm =Aln + vPx(IAA)X~l:n=Il (14.11)

(DAKm = nAln + vPx(DA)x~l:n=Il (14.12)

(DAKm =Al:m + (DA)l:n=Il (14.13)

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EXERCISES FOR LESSON 14 289

14.3. You are given:

(i) A40 0.3
(ii) 0.45
(iii) 20P40 0.9
(iv) i 0.04
Calculate A60.

14.4. You are given:

(i) For a standard life, Als:lOl 0.15.
(li) A standard life has mortality rate q45 = om.
(iii) v 0.95.

Due to an extra hazard at age 45, a certain life has q45 = 0.02, but has standard mortality at all other ages.
Calculate AAf01 for this life.

14.5. [4-F86:32] You are given:

(i) Ax:m = U
(ii) Alm = Y
(iii) Ax+n =z

Determine the value of Ax .

(A) (1 z)y+ uz
(B) (l-z)u+yz

eC) (l+z)y uz

(D) (l+z)u -yz

(E) (l+z)u-y

14.6. [150-887:27] For a select and ultimate mortality table with a one-year select period, q[x] 0.5qx.
Determine Ax - A[x]'
(A) 2A[;]:n(l- A[xJ
(B) A[;]:nO- AX+l)
(C) A[.hn(1-A 1x +ld
(D) 0.5A[;]:n(l- AX+l)
(E) O.5A ri]:f](1-A x )

14.7. [150-888:16] You are given:

(i) = 0.58896
A60

(li) Aso:b = 0.9506

(iii) ASI = 0.60122

Calculate qso.

(A) 0.017 (E) 0.018 (C) 0.021 (Ij) 0.032 (E) 0.033 I

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290 14. INSURANCE: RECURSIVE FORMULAS, VARYING INSURANCES

14.8. [150-F88:1] A whole life insurance issued to (25) provides the following benefits:
the death benefit, payable at the end of the year of death, is equal to 20,000 up to age 65 and 10,000
(I)
thereafter; and
(2) the net single premium is refunded at age 65 if the insured is still alive.
You are given:
(i) AZ5 = 0.1
(ii) AS5 = 0.2
(iii) 40P25 = 0.8
(iv) v 40 = 0.2

Calculate the net single premium for this insurance.

(A) 2,000 (B) 2,400 (C) 3,000 (D) 4,000 (E) 4,800

14.9. [150-S89:27] You are given:

(i) Ax+1 0.015
(ii) i = 0.06
(iii) qx = 0.05
Calculate Ax + A x+1'
(A) 0.60 (B) 0.86 (C) 1.18 (D) 1.30 (E) 1.56

14.10. [CAS4-F92:14] (2 points) You are given the following:

(i) Ax = 0.25
(ii) A x +15 = 0.40
(iii) 0.50
Determine A 1:f5l.
(A) Less than 0.050
(B) At least 0.050, but less than 0.060
(C) At least 0.060, but less than 0.070
(D) At least 0.070, but less than 0.080
(E) At least 0.080

14.11. [CAS4-S86:21j (2 points) You are given:

(i) Ax 0.632
(ii) 0.644
(iii) i 3%

Calculate qx.
(Al Less than 0.013
(B) At least 0.013. but less than 0.015
(C) At least 0.015, but less than 0.017
(D) At least 0.017, but less than 0.019
(E) At least 0.019

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