[10 marks] For a whole life policy issued to George, (80) with a face amount of

Question

[10 marks] For a whole life policy issued to George, (80) with a face amount of $1000 we are told: 3. a. Gross premium of $80 is paid every 6 months starting at age (80) b. Commissions are 10% and are paid each time a premium is paid c. Death benefits are paid at the end of the quarter of death d. tV denotes the gross premium reserve at time t e. 10.75V = 782.00 f. Nominal rate of interest payable quarterly is 5% g. We have an excerpt from a life table as follows: .25 .5 .75 90+k 1000 925 840 745 Calculate 10.25V.

Explanation / Answer

gross premium of $80 is paid every 6 months starting at age 80 Commission are 10% and are paid ech time a premium is paid. Death benefits are paid at the end of the quarter of death. Denotes gross premium reserve at time T 10.75V        = 782 Nominal rate of interest payble quarterly is 5% A80      = 782 Gross premium (A80+ annual expensess+ Life Expensess)/ A80 Formula      = (b+g/d)^2(AX- (Ax)^2) Annual expensess Life Expensess (925+100+

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