Thread: Term Insurance Question View Single Post
#2
01-27-2019, 12:08 AM
 Jim Daniel Member SOA Join Date: Jan 2002 Location: Davis, CA College: Wabash College B.A. 1962, Stanford Ph.D. 1965 Posts: 2,740

You're acting as though mu is a constant, but it's not a constant when you have a uniform distribution on (0, 58) for the future lifetime T_{45}. If you want to use basic principles, note that the density function for T_{45} is the constant 1/58.

Quote:
 Originally Posted by SweepingRocks https://imgur.com/a/wtvpRHh So that's a link to a question I'm stuck on. I tried using first principles instead of using the shortcut, since the shortcut isn't that intuitive for me. I can understand and calculate the pure endowment part, but for the term insurance this is what I did: tP45=1-(t/58) and to find the force of mortality between 45 and 65, I took 20P45=.65517=e^(20ux). Then solved for ux as .02114. Then I integrated between 0 and 20 for (1-(t/58))*.02114*(e^.06t), or tP45*ux*v^t. I ended up with an answer of .28037 for the 20 term insurance, while the solution has .200806. Can someone provide clarity on what I did wrong or why my approach may not work? Thank you in advance!
__________________
Jim Daniel
Jim Daniel's Actuarial Seminars
www.actuarialseminars.com
jimdaniel@actuarialseminars.com
Page generated in 0.09687 seconds with 9 queries