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#11




Quote:
A simple example of a 3 year term (where i = investment rate and X1, X2, X3 equal the reserve): A = X1 * i/(1+i) + X2*i/[(1+i)^2] + X3*i/[(1+i)^3] B = X1 + (X2X1)/(1+i) + (X3X2)/[(1+i)^2] + X3[(1+i)^3 A = the PV of investment income. B = PV of change in reserves. Do the math (and if I did the timing right) AB = 0 Chuck 
#12




Thanks...
"total of the change in reserves always equals zero (ie all the policies are lapsed at the end of your projection)" Is that implies, for a term insurance product this is always true ? (if investment yield equals discount rate) How about the Endowment product? 
#13




1. reserves before you issue the policy are zero.
2. reserves after the policy is terminated are zero. therefore, net reserve changes over the entire policy lifetime are also zero. For the endowment case, you need to recognize that reserves immediately return to zero when you pay the endowment. Different patterns of reserves are possible, and they affect the TIMING of when the profit is recognized. Even if your percentage "loading" is equal, the different levels of assumed mortality will also produce different timing of profit release. This will affect the IRR calculation. Where are you located? I suspect it is outside North America, right?
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Carol Marler, "Just My Opinion" Pluto is no longer a planet and I am no longer an actuary. Please take my opinions as nonactuarial. My latest favorite quotes, updated Apr 5, 2018. Spoiler: 
#14




Extend 10 year term spead term model to endowment...
Please help, 10year term, 1000 sum assured, spread sheet model to extend:
(1) 10year, endowment insurance.(1000 Sum assured) (2) Survival benefits of 300 at the end of five years and 700 at the end of 10 years. (Here, I attached the Spread sheet model) 
#15




If this is your homework, you should be doing it yourself.
If this is REAL work, then God have mercy on your company's policyholders.
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#16




Term Product...Extend
Quote:
Actually, real problem is something else....But I think by clarifying these points I can solve the orginal problem...!! 
#17




Quote:
Hint: For term, benefits are for deaths only. For endowment/partial endowment, benefits are amounts paid to those who survive to the given date. Add those together and put them in place of death benefits in the term formula.
__________________
Carol Marler, "Just My Opinion" Pluto is no longer a planet and I am no longer an actuary. Please take my opinions as nonactuarial. My latest favorite quotes, updated Apr 5, 2018. Spoiler: 
#18




Those are some high IRRs. I suspect you're doing something very wrong.

#19




Term model...
Quote:
But the model seems (guess) to be correct, if there is a mistake,please help me to find out it..!! 
#20




JMO is right  you need to reflect the survivor benefits. I believe the $300 & $700 should go in col M. Dumb question: you say the annual profit is 5%. 5% of what?

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