2023

THE UNIVERSITY OF HONG KONG

DEPARTMENT OF STATISTICS AND ACTUARIAL SCIENCE
STAT3901 Life Contingencies I

LN3: Life Insurance

Insurance payable at the moment of death – associated with Tx

Present-value random variable

bT – benefit function
Z = bT v T
vT – discount function

(1) n-year term life insurance

(
1, t≤n
bt = , vt = v t , t≥0
0, t>n
(
vT , T ≤n 1
∴ Z = v=
0, T >n 1+i

The actuarial present value (AP V ) is given by

Z n
AP V = E(Z) = Ā1x:n| = v t t px µx+t dt
0

bt = 1
| | |
0 ↑ n
death at t

(2) Whole life insurance

bt = 1 , t≥0
vt = v t , t≥0
Z = vT , T ≥0
Z ∞
AP V = E(Z) = Āx = v t t px µx+t dt
0

1
(3) n-year pure endowment (benefit is paid at the end of n years if the insured survives
at least n years from the time of policy issue)
(
0, t≤n
bt =
1, t>n
vt = v n , t ≥ 0
(
0, T ≤n
Z =
vn, T >n

1
1 if survive
AP V = E(Z) = Ax:n| | |
0 n
= v n n px

(4) n-year endowment insurance

bt = 1 , t≥0
(
vt, t≤n
vt =
vn, t>n
(
vT , T ≤n
Z =
vn, T >n

Z n
AP V = Āx:n| = E(Z) = v t t px µx+t dt + v n n px
0
= Ā1x:n| 1
+ Ax:n|

(5) m-year deferred whole life insurance

(
0, t≤m
bt =
1, t>m

vt = v t , t≥0
(
0, T ≤m
Z =
vT , T >m

0 1
AP V = E(Z) = m| Āx z }| { z }| {−→
Z ∞ | |

v t t px µx+t dt
| {z } | {z }
= 0 ↑ m ↑
m death death

2
(6) m-year deferred n-year term life insurance

0 1 0
z }| { z }| { z }| {
| | |

0 m m+n

(
1, m<t≤n+m
bt =
0, t ≤ m, t > n + m

vt = v t , t ≥ 0
( T
v , m<T ≤n+m
Z =
0, T ≤ m, T > n + m
Z m+n
AP V = E(Z) = m|n Āx = v t t px µx+t dt
m

(7) Annually increasing whole life insurance

bt = 1 2 3
z
|
}| { z
|
}| { z
|
}| {
|
···
0 1 2 3

bt = bt + 1c , t≥0
vt = vt, t≥0
Z = bT + 1c v T , T ≥0
Z ∞
AP V = (I Ā)x = E(Z) = bt + 1c v t t px µx+t dt
0

(8) Annually increasing n-year term insurance

(
bt + 1c , t≤n
bt =
0, t>n

vt = v t , t≥0
(
bT + 1c v T , T ≤n
Z =
0, T >n
Z n
1
AP V = (I Ā)x:n| = bt + 1c v t t px µx+t dt
0

3
(9) Annually decreasing n-year term insurance

bt = n n−1 1
z }| { z }| { ··· z }| {
| | | | |

0 1 2 ··· n−1 n

(
n − btc , t≤n
bt =
0, t>n

vt = v t , t ≥ 0
(
(n − bT c)v T , T ≤n
Z =
0, T >n
Z n
AP V = E(Z) = (DĀ)1x:n| = (n − btc)v t t px µx+t dt
0

(10) m-thly increasing whole life insurance

1 2 m m+1
bt = m m
··· m
=1 m
···
z}|{ z}|{ z}|{ z}|{
| | | | | |
1 2 m−1 m+1
0 m m
··· m
1 m

btm + 1c
bt = , t≥0
m
vt = vt, t ≥ 0
bT m + 1c T
Z = v , T ≥0
m
(I (m) Ā)x = AP V = E(Z)
Z ∞
btm + 1c t
= v t px µx+t dt
0 m

4
(11) Continuously increasing whole life insurance

bt = t, t ≥ 0
vt = v t , t ≥ 0
Z = T vT , T ≥ 0
(I¯Ā)x = AP V = E(Z)
Z ∞
= tv t t px µx+t dt
Z0 ∞ Z t 
= ds v t t px µx+t dt
0 0
Z ∞Z ∞
= v t t px µx+t dtds
0 s
Z ∞
= s| Āx ds
0

Example. Given constant force of mortality µx+t = µ, calculate Āx .

Soln:
Z ∞
Āx = v t t px µx+t dt
Z0 ∞
= e−δt t px µdt (t px = e−µt )
Z0 ∞
= e−δt e−µt µdt
0
Z ∞
= µ e−(δ+µ)t dt
0
µ
=
µ+δ
2

Example. Let the pdf of Tx be

1

80
, 0 ≤ t ≤ 80
g(t) =
0, elsewhere.

Compute Āx .

Soln:
∞ 80
1 − e−80δ
Z Z
1
Āx = t
v g(t)dt = e−δt dt = .
0 0 80 80δ
2

5
For whole life insurance,
E(Z 2 ) = E(v 2T )
Z ∞
= v 2t t px µx+t dt
Z0 ∞
= e−(2δ)t t px µx+t dt
0
= E(Z) evaluated at 2δ
2
= Āx .
In general, if bjt = bt , then
Z j = (bT vT )j
= bjT vTj = bT vTj
Hence,
E(Z j ) at δt is equivalent to E(Z) at j δt .
It holds even if the force of interest δt is a function of t .

For whole life insurance with constant force of mortality µ, we see in the previous example
that
µ
Āx = .
δ+µ
So,
2 µ
Āx = ,
2δ + µ
V ar(Z) = 2 Āx − Ā2x .
Similarly, for n-year term insurance, we have
 T
v , T ≤n
Z =
0, T > n
E(Z 2 ) = 2
Ā1x:n|
2
V ar(Z) = Ā1x:n| − (Ā1x:n| )2

For a life selected at x and now aged x + h,

Z ∞
Ā[x]+h = v t t p[x]+h µ[x]+h+t dt.
0

Example. For whole life insurance with constant force of mortality µ, find the 80th
percentile of Z.

Soln:
Pr(Z ≤ b) = Pr(e−δT ≤ b)
= Pr(−δT ≤ ln b)
 
ln b
= Pr T ≥ .
−δ

6
Set Pr(Z ≤ b) = 0.8. Then,
 
ln b −µ ln b µ ln b
Pr T ≥ = 0.8 = e −δ ⇒ = ln 0.8.
−δ δ
δ
Hence, b = (0.8) µ . 2

Example. There are 100 independent lives aged x with constant force of mortality
µ = 0.04. Each of these lives has a whole life insurance policy with benefit bt = 10
payable at the moment of death. It is assumed that the benefit payments are to be
withdrawn from an investment fund earning δ = 0.06. Calculate the minimum amount
at t = 0 so that the probability is approximately 0.95 that sufficient funds will be on
hand to withdraw the benefit payment at the death of each individual.

Soln: Note that we have 100 iid present-value random variables, Z1 , Z2 , · · · , Z100 , where
Zi = 10v T , T ≥ 0. For each policy,
10µ
E(Z) = 10Āx = ,
δ+µ

E(Z 2 ) = E((10v T )2 )
= 100(2 Āx )
100µ
= .
2δ + µ

So, E(Z) = 4 and E(Z 2 ) = 25. Let

100
X
S= Zi .
i=1

Then, E(S) = 400 and V ar(S) = 100V ar(Z) = 100(E(Z 2 ) − (E(Z))2 ) = 100(25 − 16) =
900. Thus, the required minimum is s such that

Pr(S ≤ s) = 0.95,

or !
S − E(S) s − 400
Pr p ≤ ≈ 0.95.
V ar(S) 30
Normal approximation gives
 
s − 400
Pr N (0, 1) ≤ = 0.95
30
s − 400
⇒ = 1.645 or s = 449.35.
30
2

7
 1
Recall that the AP V for the pure endowment is Ax:n| = v n n px . The variance of Z for
the pure endowment is given by
2 1 1 2
V ar(Z) = Ax:n| − (Ax:n| )
= v 2n n px − v 2n n p2x
= v 2n n pxn qx

As for the n-year endowment, its AP V can be written as

E(Z) = Āx:n| = E(Z1 ) + E(Z2 ) = Ā1x:n| + Ax:n|

1
,

where
 
vT , T ≤ n 0, T ≤ n
Z1 = , Z2 = .
0, T > n vn, T > n

Hence,

V ar(Z) = V ar(Z1 ) + V ar(Z2 ) + 2Cov(Z1 , Z2 )

Cov(Z1 , Z2 ) = E(Z1 Z2 ) − E(Z1 )E(Z2 )
= −E(Z1 )E(Z2 ) = −Ā1x:n| Ax:n|
1

lim Cov(Z1 , Z2 ) = lim −Ā1x:n| v n n px = 0

n→∞ n→∞
lim Cov(Z1 , Z2 ) = lim −Ā1x:n| v n n px = 0
n→0 n→0

Example. Assume that the force of mortality is a constant. Find n such that Cov(Z1 , Z2 )
is minimized.

Soln: Set
 Z n  
∂ 1 1

∂ t n
−Āx:n| Ax:n| = − v t px µx+t dt (v n px )
∂n ∂n 0
= −v n n px µx+n v n n px − Ā1x:n| (v n (−n px µx+n ) + n px (−δv n ))
= v n n px −v n n px µx+n + Ā1x:n| µx+n + δ Ā1x:n| = 0.

Then, we get

Ā1x:n| (δ + µx+n ) = v n n px µx+n

1
v n n px µx+n Ax:n| µx+n
Ā1x:n| = = , (1)
δ + µx+n δ + µx+n
and hence the minimized covariance is
−µx+n 1 2
min Cov(Z1 , Z2 ) = −Ā1x:n| Ax:n|
1


= Ax:n| . (2)
δ + µx+n

8
Given µx+n = µ, we have
Z n
µ
Ā1x:n| µ e−(δ+µ)t dt = 1 − e−(µ+δ)n ,


= (3)
0 µ+δ
1
Ax:n| = v n px = e−(δ+µ)n .
n
(4)

Putting (3) and (4) into (1), we obtain

µ µ
1 − e−(µ+δ)n = e−(δ+µ)n


µ+δ µ+δ
−(µ+δ)n
⇒ 1 = 2e
⇒ ln 2 − n(µ + δ) = 0
ln 2
⇒ n = .
µ+δ

Hence, it follows from (2) and (4) that the minimized covariance under constant force of
mortality is
µ −2(δ+µ) µ+δ
ln 2 −µ − ln 4 µ
min Cov(Z1 , Z2 ) = − e = e =− .
µ+δ µ+δ 4(µ + δ)
2

Example. Find the expected value, variance, cdf and median of the present-value
random variable for a 5-year deferred whole life insurance with constant force of mortality
µ = 0.04 and constant force of interest δ = 0.1.

Soln:
Z ∞
µ −5(µ+δ) 2 −0.7
E(Z) = 5| Āx = µe−(δ+µ)t dt = e = e = 0.1419,
5 µ+δ 7
µ
2
E(Z ) = e−5(µ+2δ) ,
µ + 2δ
0.04 4
V ar(Z) = e−5(0.04+0.2) − e−1.4 = 0.0301.
0.04 + 0.2 49

Recall that for a general m-year deferred whole life insurance, the present-value random
variable has the form (
0, T ≤m
Z=
vT , T > m.

The relationship of Z and T for the m-year deferred whole life insurance is summarized
in the following figure:

9
 (
0, for T ≤ m
Z = v T 1{T >m} = T
v , for T > m

vm
Z = vT

Z=0
T
m

Thus,

Pr(Z = 0) = Pr(T ≤ m)
Pr(Z ≤ b) = Pr(T ≤ m) + Pr(0 < Z ≤ b)
= Pr(T ≤ m) + Pr(0 < v T ≤ b)
 
ln b
= Pr(T ≤ m) + Pr T >
−δ
( ln b


FT (m) + 1 − FT −δ , 0 ≤ b < vm
=
1, b > vm.
For the 5-year deferred whole life insurance with constant force of mortality µ = 0.04
and constant force of interest δ = 0.1, we obtain

Pr(Z ≤ b)

0.5

0.1813
b
0 median v5

Pr(Z = 0) = Pr(T ≤ 5) = 1 − e−5µ = 1 − e−0.2

= 0.1813
0.04
(
0.1813 + b 0.1 , 0 < b < v5
Pr(Z ≤ b) =
1, b > v5.

10
Then, the median is the solution to

0.1813 + b0.4 = 0.5.

Hence, the median equals 0.05734. 2

Insurance payable at the end of the year of death – associated with Kx

Present-value random variable

bK+1 – benefit function
Z = bK+1 vK+1
vK+1 – discount function

death benefit
↓ ↓
| | |
x x+1 x+2

(1) n-year term life insurance

(
v K+1 , K = 0, 1, · · · , n − 1
Z =
0, elsewhere
n−1
X
A1x:n| = E(Z) = v k+1 k px qx+k
k=0
n−1
X
2
A1x:n| = E(Z 2 ) = v 2(k+1) k px qx+k
k=0
2

2
V ar(Z) = A1x:n| − A1x:n|

Other policies: Ax , Ax: n| , m| Ax , m|n Ax , (IA)x , I (m) A x , (DA)1x:n| , etc.

Example. Given that Ax = 0.2; Ax+25 = 0.3; Ax:25| = 0.6; and i = 0.06. Calculate
1
Ax:25| , A1x:25| , and 25| Ax .

11
Soln:
1
0.2 = Ax = A1x:25| + Ax:25| Ax+25
 
1 1
= 0.6 − Ax:25| + Ax:25| Ax+25
1 1
= 0.6 − Ax:25| (1 − Ax+25 ) = 0.6 − Ax:25| (0.7)
1 4
∴ Ax:25| =
7
6 4 1
A1x:25| = − =
10 7 35
1
25| Ax = Ax:25| Ax+25
4 3  6
= = .
7 10 35
2

Example. For a select and ultimate mortality table with 1-year select period, qx = 2q[x] .
1
Calculate Ax − A[x] if A[x]:1| = 0.007 and Ax+1 = 0.3.

Soln:

Ax = v qx + v px Ax+1 = v qx + v(1 − qx )Ax+1 .

Similarly, A[x] = v q[x] + vp[x] A[x]+1 A[x]+1 = Ax+1 with 1-year select period
= v q[x] + v(1 − q[x] )Ax+1
∴ Ax − A[x] = v q[x] − v q[x] Ax+1 (∵ qx = 2q[x] )
1
= A[x]:1| (1 − Ax+1 )
= 0.007(0.7) = 0.0049.

(2) Annually increasing whole life insurance

bk+1 = k + 1, k = 0, 1, · · ·
vk+1 = v k+1 , k = 0, 1, · · ·
K+1
Z = (K + 1)v , K = 0, 1, · · ·
X∞
(IA)x = E(Z) = (k + 1)v k+1 k px qx+k .
k=0

12
(3) Annually decreasing n-year term life insurance
(
n − k, k = 0, 1, · · · , n − 1
bk+1 =
0, k = n, n + 1, · · ·
vk+1 = v k+1 , k = 0, 1, · · ·
(
(n − K)v K+1 , K = 0, 1, · · · , n − 1
Z =
0, K = n, n + 1, · · · .

Then, the AP V is
n−1
X
(DA)1x:n| = (n − k)v k+1 k px qx+k .
k=0

This can also be expressed as

n−1 n−k−1
!
X X
(DA)1x:n| = 1 v k+1 k px qx+k
k=0 j=0
n−1 n−j−1
X X
= v k+1 k px qx+k
j=0 k=0
n−1
X
= A1x:n−j| .
j=0

Example. You are given that

(a) A35:1| = 0.9434; (b) A35 = 0.13; (c) p35 = 0.9964; (d) (IA)35 = 3.71.

Calculate (IA)36 .

Soln:
∞
X
(IA)35 = (k + 1)v k+1 k p35 q35+k
k=0
∞
X
= (k + 1)v k+1 k p35 q35+k + v q35
k=1
∞
X
= v q35 + v p35 (k + 1)v k k−1 p36 q35+k
k=1
X∞
= v q35 + v p35 (r + 2)v r+1 r p36 q36+r
r=0
∞ ∞
!
X X
= v q35 + v p35 (r + 1)v r+1 r p36 q36+r + v r+1 r p36 q36+r
r=0 r=0
= v q35 + v p35 ((IA)36 + A36 ) .

13
On the other hand,
1
A35:1| = A35:1| + A35:1|1 = vq35 + vp35 = v = 0.9434,

and
1
A35 = A35:1| + vp35 A36
A35 − vq35 0.13 − 0.9434(1 − 0.9964)
⇒ A36 = =
vp35 0.9434(0.9964)
= 0.13468.

Therefore,
(IA)35 − vq35
(IA)36 = − A36 = 3.8085.
vp35
2

Example. For a group of individuals all age x, you are given:

(a) 25% are smokers (s), 75% are nonsmokers (ns),

s
(b) qx+k = 0.1 (1 + k) , k = 0, 1, 2, . . .,
ns
(c) qx+k = 0.05 (1 + k) , k = 0, 1, 2, . . .,

(d) i = 0.02.

Calculate A1x:2| for an individual chosen at random from this group.

Soln: Let Z be the present-value random variable. Then,

E(Z|smoker) = vqxs + v 2 psx qx+1

s

= (1.02)−1 (0.1) + (1.02)−2 (1 − 0.1) (0.2)

= 0.2710
E(Z|nonsmoker) = vqxns + v 2 pns ns
x qx+1

= (1.02)−1 (0.05) + (1.02)−2 (1 − 0.05) (0.1)

= 0.1403

So,

E (Z) = E (Z|smoker) Pr (smoker) + E (Z|nonsmoker) Pr (nonsmoker)

= (0.2710) (0.25) + (0.1403) (0.75)
= 0.1730

14
Recursion relations

(i) Ax = vqx + vpx Ax+1

1
(ii) A1x:n| = vqx + vpx Ax+1:n−1|

(iii) Ax:n| = vqx + vpx Ax+1:n−1|

(iv) m|n Ax= vpx m−1|n Ax+1

 
1
(v) (IA)1x:n| = vqx + vpx Ax+1:n−1| 1
+ vpx (IA)x+1:n−1|
1
(vi) (DA)1x:n| = nvqx + vpx (DA)x+1:n−1|

(vii) (IA)x = (v qx + v px Ax+1 ) + v px (IA)x+1

Example. A group of 100 lives aged 30 set up a fund to pay 1,000 at the end of the year
of death of each member to a designated survivor. Their mutual agreement is to pay into
the fund an amount equal to the whole life insurance actuarial present value calculated
on the basis of the AM92 Assured Lives Mortality Table at 6% interest. The members,
not selected by insurance company, decided to use this population table as the basis of
their plan. The actual experience of the fund is 1 death in each of the second and fifth
years; interest income is 6% in the first year, 6.5% in the second and third years, 7% in
the fourth and fifth years. What is the difference, at the end of the first 5 years, between
the expected size of the fund as determined at the inception of the plan and the actual
fund?

Soln: On the agreed basis, each live pays 1, 000 A30 = 1, 000 (0.07328) = 73.28. So, the
fund starts at (100) (73.28) = 7, 328 (100 lives). For 100 lives aged 30, the expected size
of the fund after 5 years will be
`35 9, 894.4299
(1, 000) (100) A35 = (1, 000) (100) (0.09488)
`30 9, 925.2094
= 9, 458.58.

The development of the actual fund would be as follows:

F0 = (1, 000) (100)A30 = 7, 328

F1 = 7, 328 (1.06) = 7, 767.68
F2 = 7, 767.68 (1.065) − 1, 000 = 7, 272.58
F3 = 7, 272.58 (1.065) = 7, 745.3
F4 = 7, 745.3 (1.07) = 8, 287.47
F5 = 8, 287.47 (1.07) − 1, 000 = 7, 867.59

15
where Fk denotes the size of the fund at the end of insurance year k. Thus, the difference
is
9, 458.58 − 7, 867.59 = 1, 590.99.
This result combines the investment experience and the mortality experience for the 5-
year period. There were gains from the investment earnings in excess of the assumed rate
of 6%. On the other hand, there were losses on the mortality experience of 2 deaths as


compared to the expected number of deaths 100 1−`35 /`30 = 0.3101. The interpretation
of such results in terms of the various sources such as investment earnings and mortality
is an actuarial responsibility. 2

(4) Whole life with a death benefit of 1 payable at the end of the m-thly interval in which
death occurs

death benefit
↓ ↓
| | | | |

1 j
x ··· x+k x+k+ m
··· x+k+ m
··· x+k+1

Present-value random variable

J+1 K = 0, 1, · · · ,
Z = v K+ m ,
J = 0, 1, · · · , m − 1.

Death benefit of 1 is payable at the end of the m-thly interval

death benefit
. .
| |
j j+1
k+ m
k+ m

k is the number of complete insurance years lived prior to death

j is the number of complete m-th of a year lived in the year of death

If death occurs in the (k + 1)th year,

| |

k . k+1
(k + 1)th year

16
then the AP V at time k
m−1
X j+1
= v m 1 qx+k+ j j px+k
m m m
j=0

Summing over all k, we get the AP V of this policy at issue

∞ m−1
X X j+1
A(m)
x = v k k px v m 1 qx+k+ j j px+k .
m m m
k=0 j=0

Relationships between Ā and A

Recall that T = K + S and that K and S are independent under UDD.

Āx = E(v T ) = E v K+1 (1 + i)1−S

E v K+1 (1 + i)1−S = E v K+1 E (1 + i)1−S

Z 1 Z 1
1−S 1−s
(1 + i)t dt


and E (1 + i) = (1 + i) ds =
0 0
1
(1 + i)t i
= =
δ δ
0
i
∴ Āx = Ax .
δ

This type of relation holds under UDD if vT = v T and bT is a function of bT c. For

instance,

1 i
I Ā x:n|
= (IA)1x:n| ,
δ

i
I Ā x = (IA)x ,
δ

1 i
DĀ x:n| = (DA)1x:n| .
δ

17
Counterexample. For I¯Ā x ,

bT = T = K + S (not a function of bT c)
K+S


E(Z) = E (K + S)v
= E (K + 1)v K+1 (1 + i)1−S − v K+1 (1 − S)(1 + i)1−S

= E (K + 1)v K+1 (1 + i)1−S − E v K+1 E (1 − S)(1 + i)1−S

i
(IA)x − Ax E (1 − S)(1 + i)1−S


=
Zδ 1
E (1 − S)(1 + i)1−S (1 − s)(1 + i)1−s ds


∵ =
Z0 1 Z 1
t
= t(1 + i) dt = t eδt dt
0 0
1
1
t eδt
Z
1
= − eδt dt
δ δ 0
0
1
eδ eδt
= − 2
δ δ
0
(1 + i) (1 + i) − 1 (1 + i) i
= − 2
= − 2
δ δ δ δ
i 1+i 1
= −
δ i δ
 
i 1 1
= −
δ d δ
   
i 1 1
I¯Ā x


∴ = (IA)x − − Ax .
δ d δ
2

Differential equations for Āx

Z ∞
Āx = v t t px µx+t dt
0
Z ∞
1
= v x+t S0 (x + t)µx+t dt
S0 (x)v x 0
Z ∞
1
= v y S0 (y)µy dy
S0 (x)v x x
− (S00 (x)v x + S0 (x)v x ln v) ∞ y
Z
d 1
∴ Āx = x 2
v S0 (y)µy dy + x
(−v x S0 (x)µx )
dx (S0 (x)v ) x S0 (x)v
= (µx + δ) Āx − µx .

It is parallel to
Ax+1 − Ax = i Ax − qx (1 − Ax+1 ) .

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 Summary : Insurance Models
Continuous Models: T Discrete Models: K
(Death benefit paid at the moment of death) (Death benefit paid at the end of the year of death)

ZT APV ZK+1 APV

Whole life vT , T ≥ 0 Āx v K+1 , K = 0, 1, · · · Ax

n-year term vT , T ≤ n v K+1 , K = 0, 1, · · · , n − 1
Ā1x: n| A1x: n|
0, T > n 0, K = n, · · ·
1 1
n-year pure endowment 0, T ≤ n Ax:n| = n Ex 0, K = 0, 1, · · · , n − 1 Ax:n| = n Ex

vn , T > n v n , K = n, n + 1, · · ·
n-year endowment vT , T ≤ n v K+1 , K = 0, 1, · · · , n − 1
Āx:n| Ax:n|
vn , T > n v n , K = n, n + 1, · · ·
m-year deferred 0, T ≤ m 0, K = 0, 1, · · · , m − 1
m| Āx m| Ax
whole life vT , T > m v K+1 , K = m, m + 1, · · ·
m-year deferred 0, T ≤ m 0, K = 0, 1, · · · , m − 1

n-year term vT , m < T ≤ n + m m|n Āx v K+1 , K = m, m + 1, · · · , m + n − 1 m|n Ax

0, T > n 0, K = m + n, m + n + 1, · · ·
Increasing annually
bT + 1cv T , T ≥ 0 (I Ā)x (K + 1)v K+1 , K = 0, 1, · · · (IA)x
whole life
Increasing m-thly
bT m+1c T J+1

K = 0, 1, · · ·
v ,T ≥0 (I (m) Ā)x K+ v K+1 , (I (m) A)x
whole life m m J = 0, 1, · · · , m − 1
Increasing continuously
T vT , T ≥ 0 (I¯Ā)x NA
whole life


Decreasing annually n − bT c v T , 0 ≤ T ≤ n
1 (n − K)v K+1 , K = 0, 1, · · · , n − 1
1
DĀ x:n| DA x:n|
n-year term 0, T > n 0, K = n, n + 1, · · ·
Increasing annually bT + 1cv T , T ≤ n
1 (K + 1)v K+1 , K = 0, 1, · · · , n − 1
1
I Ā x:n| IA x:n|
n-year term 0, T > n 0, K = n, n + 1, · · ·
bT m+1c T
K+1 K = 0, 1, · · · , n − 1
Increasing m-thly v , T ≤n K + J+1 v ,
m
1 m J = 0, 1, · · · , m − 1
1
I (m) Ā x:n|
I (m) A x:n|
n-year term 0, T > n 0, K = n, n + 1, · · ·
Increasing continuously T vT , T ≤ n
1
I¯Ā x:n| NA
n-year term 0, T > n
Increasing annually bT + 1cv T , T ≤ n
(K + 1)v K+1 , K = 0, 1, · · · , n − 1

I Ā IA
n-year endowment nv n , T > n x:n| nv n , K = n, n + 1, · · · x:n|

bT m+1c T
K+1 K = 0, 1, · · · , n − 1
Increasing m-thly v , T ≤n K + J+1 v ,
m
m J = 0, 1, · · · , m − 1

n
I (m) Ā I (m) A
n-year endowment nv , T > n x:n| nv n , K = n, n + 1, · · · x:n|

Increasing continuously T vT , T ≤ n
I¯Ā


n x:n| NA
n-year endowment nv , T > n

19