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Use table D, the Standard Ultimate Survival Model with i=5%. Consider a 25-year term insurance isued to a life aged 35 with annual premiums payable throught the policy term, with sum insured $100,000 payable at the end of the year of death if death occurs during the term. Expenses are as follows: 10% of the 1st annual premium and 2% of each subsequent premium, with an inception expense of $100 and renewal expenses of (at the time of the payment of the 2nd and each subsequent premium) of $15. Calculate the annual premium (using the equivalence principle).

Use table D, the Standard Ultimate Survival Model with i=5%. Consider a 25-year term insurance isued to a life aged 35 with annual premiums payable throught the policy term, with sum insured $100,000 payable at the end of the year of death if death occurs during the term. Expenses are as follows: 10% of the 1st annual premium and 2% of each subsequent premium, with an inception expense of $100 and renewal expenses of (at the time of the payment of the 2nd and each subsequent premium) of $15. Calculate the annual premium (using the equivalence principle).

College Algebra
College Algebra
7th Edition
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:James Stewart, Lothar Redlin, Saleem Watson
Chapter8: Sequences And Series
Section8.4: Mathematics Of Finance
Problem 2E
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Use table D, the Standard Ultimate Survival Model with i=5%.

 

Consider a 25-year term insurance isued to a life aged 35 with annual premiums payable throught the policy term, with sum insured $100,000 payable at the end of the year of death if death occurs during the term. Expenses are as follows:

 

10% of the 1st annual premium and

2% of each subsequent premium,

with an inception expense of $100 and

renewal expenses of (at the time of the payment of the 2nd and each subsequent premium) of $15.

Calculate the annual premium (using the equivalence principle).

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