SOA Exam FAM Sample Question 4.6

Study guide: Exam FAM

For a 3-year term insurance of 1000 on (70), you are given:

(i) $q^{SULT}_{70+k}$ is the mortality rate from the Standard Ultimate Life Table, for $k = 0, 1, 2$

(ii) $q_{70+k}$ is the mortality rate used to price this insurance, for $k = 0, 1, 2$

(iii) $q_{70+k} = (0.95)^{k}\,q^{SULT}_{70+k}$ , for $k = 0, 1, 2$

(iv) $i = 0.05$

Calculate the single net premium.

[A modified version of Question 13 on the Fall 2013 exam]

Concepts tested