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 Long-Term Actuarial Math Old Exam MLC Forum

#1
11-10-2018, 09:17 PM
 JohnTravolski Member Non-Actuary Join Date: Aug 2016 Posts: 48

I presume that the net single premium would be given by the formula:

But I'm unsure of how to calculate these values given the limited information about that survival function. Is there an easy way to do this that I'm not seeing? Is the formula I provided even the correct net single premium?
#2
11-10-2018, 09:43 PM
 Academic Actuary Member Join Date: Sep 2009 Posts: 8,528

For one thing your second term needs a 5 year deferral factor. As mortality is constant over the ten year period the five year term NSPs will be the same per dollar of coverage,
Calculate the premiums assuming the benefit is paid EOY by summing geometric series.
Then do the UDD adjustment for payable at the end of the quarter.
#3
11-10-2018, 10:24 PM
 JohnTravolski Member Non-Actuary Join Date: Aug 2016 Posts: 48

Quote:
 Originally Posted by Academic Actuary For one thing your second term needs a 5 year deferral factor. As mortality is constant over the ten year period the five year term NSPs will be the same per dollar of coverage, Calculate the premiums assuming the benefit is paid EOY by summing geometric series. Then do the UDD adjustment for payable at the end of the quarter.
Okay, I think I get it. You're saying it should be this, right?

I end up with 3148.49 as the final answer. Is this what you get?
#4
11-10-2018, 10:27 PM
 Academic Actuary Member Join Date: Sep 2009 Posts: 8,528

Looks good.