73
7-6
Show that
7 " 1.4]
Poa = Peat Pea Aaa
A 10-pay limited-payment whole life contract issued to (30) pays
a benefit at the end of the year of failure of amount 1000 plus a
refund of all net level premiums paid, without interest. Show that
the net level annual premium, determined by the equivalence
principle, is
100
~ UA),
1091459
1
30:01
Fsoi0}
Calculate the value of 1000P(4,,,), assuming UDD over each
interval (x,x+1) and the following values:
Ay = 804 600
For a unit whole life insurance, let L, denote the present value
of loss random variable when the premium is chosen such that
E{Lx]=0, and let Z; denote the present value of loss random
variable when the premium is chosen such that E[Z,] = —.20.
Given that Var(L,) =.30, find the value of Var(Z.).
Find the value of 1000[P(4,) - P,], given the following values:
ort
SFO R= OL My = My forall = 08Exercise 6.15 An insurer issues a 20-year endowment insurance policy to (40)
with a sum insured of $250000, payable at the end of the year of death.
Premiums are payable annually in advance throughout the term of the contract.
(a) Calculate the premium using the equivalence principle.
(b) Find the mean and standard deviation of the net future Loss random variable
using the premium in (a).
(c) Assuming 10000 identical, independent contracts, estimate the 99th
percentile of the net future loss random variable using the premium in (a).