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

Budget, what are the advantages and disadvantages of incremental budgeting?...

what are the advantages and disadvantages of incremental budgeting?

State about the financing mbo, State about the Financing MBO There are ...

State about the Financing MBO There are many sources of finances available for an MBO Venture capitalists Merchant banks Institutional investors such as pension funds

Weighted average cost of capital, Weighted Average Cost of Capital Wei...

Weighted Average Cost of Capital Weighted average cost of capital is the average cost of the costs of several sources of financing. Weighted average cost of capital is also kn

Why the term objective is used for, Why the term objective is used for ...

Why the term objective is used for The term is used in a rather narrow sense of what a firm must attempt to achieve with its financing, investment and dividend policy decisions

Methods of workers participation in management, Methods of workers particip...

Methods of workers participation in management: the various methods of workers participation in management are as follows: 1. Informative participation: it refers to sharing of

Illustrations of substantive tests, Illustrations of substantive tests ...

Illustrations of substantive tests Agree a sample of wages payments to the existence of these individuals and personnel records. Agree a sample of cashbook payments to

Explain the incremental cash flows of a capital project, Explain what is me...

Explain what is meant by the incremental cash flows of a capital project. Incremental cash flows are defined by the change in total firm cash inflows and cash outflows which ca

Wishart and Associates — Financial Alternatives, 4. In the front of each fo...

4. In the front of each folder were some handwritten notes that Meenda had made on Monday before he left. Give focus on the said notes.

Show limitations of profit maximization, Q. Show Limitations of Profit maxi...

Q. Show Limitations of Profit maximization? The Profit maximization criterion is criticized on the following grounds: i) Quality of Benefits: Profit maximization approach ig

Stakeholders, identify five stakeholder groups and breifly explain their fi...

identify five stakeholder groups and breifly explain their financil and other objectives

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