Pure endowment-opposite of term insurance

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A Pure Endowment is, in some sense, the opposite of term insurance. All insurance companies sell them. A $1 n-year pure endowment pays $1 at time nyear if the insured is alive. A $1 n-year Endowment (distinct from “pure” endowment) is as follows: if the insured is alive at time n-year, they receive $1; if they die before time n-year, their beneficiary receives $1. Thus, it is a combination of a pure endowment and n-year term insurance. Derive a formula for the actuarial present value of a $1 n-year endowment. Then apply the formula to the case of a life age x=55, n=10, r=.05, and the GoMa parameters are m=86.34, b=9.5 and lambda=0.

Reference no: EM13941564

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