Hello, this is finance ( insurance ) question Please show me your work ,how you
ID: 364139 • Letter: H
Question
Hello, this is finance ( insurance ) question Please show me your work ,how you get the answer explain to me.
please answer them and show me the way that you get the answer as soon as posible
1)
Assume a whole life insurance policy , sold to a 97 year old. The mortality rate is given as following
x
q(x)
97
0.4802
98
0.65789
99
1
Assume: Death benefit = $1000; Interest rate = 12% , premium paid at the beginning of the year and death benefit paid at the end of the year. Please find the net single premium.
Hint:
Year
x
q(x)
Expected value of DB
Discount factor
PV
1
97
0.4802
2
98
0.65789
3
99
1
x
q(x)
97
0.4802
98
0.65789
99
1
Explanation / Answer
Year x q(x) Expected value of DB ($1000 X DB) Discount factor = (1/(1+12%)^Year) PV Expected DB X Discount Factor 1 97 0.4802 480.2 0.892857143 $ 428.75 2 98 0.65789 657.89 0.797193878 $ 524.47 3 99 1 1000 0.711780248 $ 711.78 Single Net premium (Sum of PVs) $1,665.00
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