SOA Exam FAM Sample Question 4.13

Study guide: Exam FAM

For a 2-year deferred, 2-year term insurance of 2000 on [65], you are given:

(i) The following select and ultimate mortality table with a 3-year select period:

$x$	$q_{[x]}$	$q_{[x]+1}$	$q_{[x]+2}$	$q_{x+3}$	$x+3$
65	0.08	0.10	0.12	0.14	68
66	0.09	0.11	0.13	0.15	69
67	0.10	0.12	0.14	0.16	70
68	0.11	0.13	0.15	0.17	71
69	0.12	0.14	0.16	0.18	72

(ii) $i = 0.04$

(iii) The death benefit is payable at the end of the year of death

Calculate the actuarial present value of this insurance.

[Question 9 on the Fall 2015 exam]

Concepts tested