SOA Exam FAM Sample Question 6.16
Study guide: Exam FAM
For a fully discrete 20-year endowment insurance of 100,000 on (30), you are given:
(i) d = 0.05
(ii) Expenses, payable at the beginning of each year, are:
| First Year: Percent of Premium | First Year: Per Policy | Renewal Years: Percent of Premium | Renewal Years: Per Policy | |
|---|---|---|---|---|
| Taxes | 4% | 0 | 4% | 0 |
| Sales Commission | 35% | 0 | 2% | 0 |
| Policy Maintenance | 0% | 250 | 0% | 50 |
(iii) The net premium is 2143
Calculate the gross premium using the equivalence principle.
[Question 10 on the Spring 2014 exam]
- A) 2410
- B) 2530
- C) 2800
- D) 3130
- E) 3280
Answer this question and see the worked solution