Calculate the net premium retrospective reserve value, Financial Management

Assignment Help:

Question:

On 1st October 2001 a man then aged 34 took out an endowment assurance policy with a sum assured of $100,000 payable on survival to age 50 or at the end of the year of earlier death.

(a) Calculate the net premium retrospective reserve value as at 30th September 2005.

(b) Over the past 5 years the insurer has experienced heavier than expected mortality on the endowment business and has decided to increase the policy values held for the future. This is to be done by "rating up" all insured lives by 3 years, which means that all lives will be treated as though they were 3 years older than they actually are (but the premium rate is unchanged). Calculate the net premium prospective reserve value for the policy as at 30 September 2005 on this new basis.

(c) Explain any difference between the reserve values in part (a) and part (b).

Basis: AM92 Select mortality, 4% pa interest


Related Discussions:- Calculate the net premium retrospective reserve value

Relation between Inflation and FX, If the 180-day forward rate for the Poun...

If the 180-day forward rate for the Pound were GBPARS 21.45 (today GBPARS 19.5) what does this tell you about inflation in Argentina, explain your assumptions and the link with the

Report on the valuation of endess, Q. Report on the valuation of Endess? ...

Q. Report on the valuation of Endess? Ideally the valuation must be based upon the present value of incremental cash flows that result from the buy-in but in practice this data

Cash flows from portfolio of us standard mortgages, The cash flows ...

The cash flows from a portfolio of US standard mortgages have the characteristic of being uncertain. The cash flows from the mortgage consists of three comp

Employee benefit plan, Employee Benefit Plan - Compensation arrangement, u...

Employee Benefit Plan - Compensation arrangement, usually in writing, used by employers in addition to wages or salary. Some plans like group term life insurance, medical insuranc

Management of working capital, Q. Management of Working Capital? Workin...

Q. Management of Working Capital? Working capital, in general practice, refers to the excess of current assets over current liabilities. Management of working capital therefore

Calculate the standard deviation of a portfolio , Aquaman stock has exhibit...

Aquaman stock has exhibited a standard deviation in returns of 0.7, whereas Green Lantern stock has exhibited a standard deviation of 0.8. The correlation coefficient between the

State the factors of small organisations, State the factors of Small organi...

State the factors of Small organisations - More creative and dynamic - More flexible to adapt to environmental changes - More informal and small for example some people l

Calculate average amount of working capital required, X & Y is desirous to ...

X & Y is desirous to purchase a business and has consulted you, and one point on which you are asked to advice them, is the average amount of working capital which will be required

Capital budgeting, #how to calculate initial investment cash flows ..

#how to calculate initial investment cash flows ..

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd