LTAM - PROBLEM SET 6 (SECTIONS 21 TO 27)
MULTIPLE CHOICE PROBLEMS
1. Two -year endowment insurance policies each have benefit amount 1 , with death benefit
payable at the moment of death. Policy 1 is paid for with a
...
LTAM - PROBLEM SET 6 (SECTIONS 21 TO 27)
MULTIPLE CHOICE PROBLEMS
1. Two -year endowment insurance policies each have benefit amount 1 , with death benefit
payable at the moment of death. Policy 1 is paid for with a single net premium paid on the issue
date. Policy 2 is paid for by means of level continuous net premiums payable during the term of
the insurance. In both cases, the premiums are determined by the equivalence principle. Given
that and , for what value of is , where and > ! T Ò P Ó œ T Ò P Ó œ P P > " " # > # # > " > #
are the duration- future loss functions for policies 1 and 2, respectively? >
Suppose that be the premium payable under policy 2 .
_T
A) B) C) D) E) " $ $ $
$ $ $ $
T T T T T $
T T
" " " " " T
"
_ _ _ _ _
_ _
_
2. Given that , and , what is the value per $1,000 ÞÞ ÞÞ ÞÞ + œ (Þ(# + œ )Þ## + œ ""Þ!!
'#À"! '#À"" '#À#! | | |
benefit, assuming level net premiums, of the 10th year terminal net reserve on a 20 year fully
discrete endowment insurance policy issued to (62) (nearest $5) ?
A) 400 B) 405 C) 410 D) 415 E) 420
3. If and then " B " B" # B Z œ + Z œ Z œ
A) B) C) D) + + ‚ + + ‚ + + ‚
E) Cannot be determined from the given information
4. A whole life insurance policy of face amount $1,000 is issued to (40) . On the basis of some
mortality table and a 4% interest rate, the following values are determined relative to the first
year of the policy : (i) net premium = $20 (due at the start of the year) , and (ii) terminal net
reserve at the end of the year = $18 . What is ? ;%!
A) .00274 B) .00280 C) .00285 D) .00290 E) .00300
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