Actuarial Outpost Reserve Recursion Problem
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#1
04-30-2006, 09:47 PM
 Peter Lemonjello Member Join Date: May 2005 Posts: 323
Reserve Recursion Problem

I'm stuck on this problem:

For a fully discrete whole life insurance with non-level benefits on (70):
(i) The level benefit premium for this insurance is equal to P_50.
(ii) q_70+k = q_50 _ 0.01, k = 0, 1, ...19
(iii) q_60 = 0.01368
(iv) k_V = k_V_50, k = 0, 1, .. 19
(v) 11_V_50 = 0.16637

Calculate b11, the death benefit in year 11. (Answer is 0.648)

Ok, the solution sets up two recursion equations:

10_V + P = v q_80 b_11 + v p_80 11_V
10_V_50 + P = v q_60(1) + v p_60 11_V_50

My question is this: What tells us that the benefit for (50) in year 10 is 1?
#2
04-30-2006, 09:58 PM
 Peter Lemonjello Member Join Date: May 2005 Posts: 323

If I would just read all the solution, I would have realized that k_V_50 is the reserve for a standard insurance with unit benefit.

You may resume your regulary schedule programming. Sorry for the interruption ....
#3
09-16-2017, 12:18 PM
 Kely SOA Join Date: Sep 2017 College: University of Iowa Second Year Graduate Posts: 6

Good job man, I also met the problem like yours and I solved it due to your second reply. Thanks.