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Long-Term Actuarial Math Old Exam MLC Forum

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Old 03-23-2014, 11:37 AM
clarinetist clarinetist is offline
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Default SOA 160 - Ambiguity?



To me, it isn't clear whether or not the 10,000 is also a withdrawal benefit. When I did this problem, I assumed it was - but the solution assumes that it is only a death benefit. Any thoughts on this?
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Old 03-23-2014, 11:40 AM
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I don't remember withdrawal benefits being on any type of life insurance except whole life when I took MLC (universal life wasn't on my exam at the time). Are there other questions that assume withdrawal benefits for term life?
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Old 03-23-2014, 12:00 PM
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Some term insurance in the real world has withdrawal benefits; I don't know if any in MLC would. In the real world, the withdrawal benefits would be much smaller than the death benefits. Withdrawal is within the control of the insured. It would make no sense to pay the face amount for an event the insured could control.

In any case, it is irrelevant here whether there are withdrawal benefits. Read the question carefully: it asks for the actuarial present value of the death benefits.
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Old 03-23-2014, 12:01 PM
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Quote:
Originally Posted by Gandalf View Post
Some term insurance in the real world has withdrawal benefits; I don't know if any in MLC would. In the real world, the withdrawal benefits would be much smaller than the death benefits. Withdrawal is within the control of the insured. It would make no sense to pay the face amount for an event the insured could control.

In any case, it is irrelevant here whether there are withdrawal benefits. Read the question carefully: it asks for the actuarial present value of the death benefits.


Thanks, Gandalf.
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Old 03-23-2014, 12:25 PM
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The answer is C. 506.6007934
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