An insurance company issues a special policy to (65) with the following benefits: (i) A death benefit of 100,000, payable at the end of year of death, provided death occurs before age 85. (ii) A whole life annuity-due of 45,000 per year starting on the policyholder’s 85th birthday. You are also given: • Annual level premiums of P are payable for 20 years. • Premiums are determined using the equivalence principle. • Mortality follows the Standard Ultimate Life Table. • i = 0.05. Calculate P. A. 7670 B. 7870 C. 8070 D. 8270 E. 8470
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
An insurance company issues a special policy to (65) with the following benefits:
(i) A death benefit of 100,000, payable at the end of year of death, provided death occurs before age 85.
(ii) A whole life annuity-due of 45,000 per year starting on the policyholder’s 85th birthday. You are also given: • Annual level premiums of P are payable for 20 years. • Premiums are determined using the equivalence principle. • Mortality follows the Standard Ultimate Life Table. • i = 0.05.
Calculate P.
A. 7670 B. 7870 C. 8070 D. 8270 E. 8470
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