Question

A life office issued 600 identical 25 year temporary assurance policies to lives aged 30 exact with a sum assured of Kshs 100000 payable at the end of year of death. Premiums are payable annually in advance for 20 years or until earlier death. The basis is • Mortality AM92 Ultimate • Interest 4% per annum (i) Calculate the following actuarial function and solve for the annual net premium for each policy correct to 5 decimal places. • $ddot{a}_{30:20}$ • $A_{30:25}^{1}$ • Annual Net Premium per policy (ii) Calculate the net premium reserve per policy at the start and at the end of the 20$^{th}$ year of the policy correct to two decimal places. • Reserve policy at start • Reserve policy at end (iii) Calculate the mortality profit or loss to the life office during the 20th year if 10 policyholders die during the first nineteen years of the policies and 0 policyholders die during the 20th year.

          A life office issued 600 identical 25 year temporary assurance policies to lives aged 30 exact with a
sum assured of Kshs 100000 payable at the end of year of death. Premiums are payable annually in
advance for 20 years or until earlier death. The basis is
• Mortality AM92 Ultimate
• Interest 4% per annum
(i) Calculate the following actuarial function and solve for the annual net premium for each policy
correct to 5 decimal places.
• $ddot{a}_{30:20}$ 
• $A_{30:25}^{1}$
• Annual Net Premium per policy
(ii) Calculate the net premium reserve per policy at the start and at the end of the 20$^{th}$ year of the
policy correct to two decimal places.
• Reserve policy at start
• Reserve policy at end
(iii) Calculate the mortality profit or loss to the life office during the 20th year if 10 policyholders die
during the first nineteen years of the policies and 0 policyholders die during the 20th year.

A life office issued 600 identical 25 year temporary assurance policies to lives aged 30 exact with a
sum assured of Kshs 100000 payable at the end of year of death. Premiums are payable annually in
advance for 20 years or until earlier death. The basis is
• Mortality AM92 Ultimate
• Interest 4% per annum
(i) Calculate the following actuarial function and solve for the annual net premium for each policy
correct to 5 decimal places.
• ddota30:20
• A30:25^1
• Annual Net Premium per policy
(ii) Calculate the net premium reserve per policy at the start and at the end of the 20^th year of the
policy correct to two decimal places.
• Reserve policy at start
• Reserve policy at end
(iii) Calculate the mortality profit or loss to the life office during the 20th year if 10 policyholders die
during the first nineteen years of the policies and 0 policyholders die during the 20th year.

Added by Inmaculada S.

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