For a 20-year endowment insurance on (65) with face amount 1,000: - Benefits are payable at the moment of death, or at the end of 20 years if the insured survives. Mortality follows the Illustrative Life Table with i = 0.06. Deaths are uniformly distributed between integral ages. - Gross premiums are payable at the beginning of each year for 20 years, and are determined by the equivalence principle. - Commissions and taxes are 35% of the gross premium in the first year, 5% in the other years, and are paid at the beginning of each year. Other expenses are 1 in all years, paid at the beginning of the year. Calculate the gross premium for the endowment insurance.
For a 20-year endowment insurance on (65) with face amount 1,000: - Benefits are payable at the moment of death, or at the end of 20 years if the insured survives. Mortality follows the Illustrative Life Table with i = 0.06. Deaths are uniformly distributed between integral ages. - Gross premiums are payable at the beginning of each year for 20 years, and are determined by the equivalence principle. - Commissions and taxes are 35% of the gross premium in the first year, 5% in the other years, and are paid at the beginning of each year. Other expenses are 1 in all years, paid at the beginning of the year. Calculate the gross premium for the endowment insurance.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:For a 20-year endowment insurance on (65) with face amount 1,000:
- Benefits are payable at the moment of death, or at the end of 20 years if the
insured survives.
Mortality follows the Illustrative Life Table with i = 0.06.
Deaths are uniformly distributed between integral ages.
Gross premiums are payable at the beginning of each year for 20 years, and are
determined by the equivalence principle.
Commissions and taxes are 35% of the gross premium in the first year, 5% in the
other years, and are paid at the beginning of each year.
- Other expenses are 1 in all years, paid at the beginning of the year.
Calculate the gross premium for the endowment insurance.
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