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Question 2 A life assurance company issues a 20-year term, insurance policy to a life aged 40, with sum insured £100,000 payable immediately on death. Level premiums are payable monthly in advance throughout the term. The commissions are 10% of each premium payment (incurred at the premium payment times). Mortality follows AM92 ultimate life table with uniform distribution of deaths (UDD) assumption between integer years. Interest is i = 6% per annum. (a) Write down an expression for the gross loss at issue random variable. (b) Write down the equation of value for this policy. (c) Calculate the gross monthly premium.

Question 2 A life assurance company issues a 20-year term, insurance policy to a life aged 40, with sum insured £100,000 payable immediately on death. Level premiums are payable monthly in advance throughout the term. The commissions are 10% of each premium payment (incurred at the premium payment times). Mortality follows AM92 ultimate life table with uniform distribution of deaths (UDD) assumption between integer years. Interest is i = 6% per annum. (a) Write down an expression for the gross loss at issue random variable. (b) Write down the equation of value for this policy. (c) Calculate the gross monthly premium.

Advanced Engineering Mathematics
Advanced Engineering Mathematics
10th Edition
ISBN:9780470458365
Author:Erwin Kreyszig
Publisher:Erwin Kreyszig
Chapter2: Second-order Linear Odes
Section: Chapter Questions
Problem 1RQ
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Question 2 A life assurance company issues a 20-year term, insurance policy to a life aged 40, with sum insured £100,000 payable immediately on death. Level premiums are payable monthly in advance throughout the term. The commissions are 10% of each premium payment (incurred at the premium payment times). Mortality follows AM92 ultimate life table with uniform distribution of deaths (UDD) assumption between integer years. Interest is i = 6% per annum. (a) Write down an expression for the gross loss at issue random variable. (b) Write down the equation of value for this policy. (c) Calculate the gross monthly premium.
Transcribed Image Text:Question 2 A life assurance company issues a 20-year term, insurance policy to a life aged 40, with sum insured £100,000 payable immediately on death. Level premiums are payable monthly in advance throughout the term. The commissions are 10% of each premium payment (incurred at the premium payment times). Mortality follows AM92 ultimate life table with uniform distribution of deaths (UDD) assumption between integer years. Interest is i = 6% per annum. (a) Write down an expression for the gross loss at issue random variable. (b) Write down the equation of value for this policy. (c) Calculate the gross monthly premium.
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