SOA Exam FAM Sample Question 6.35
Study guide: Exam FAM
For a fully discrete whole life insurance policy of 100,000 on (35), you are given:
(i) First year commissions are 19% of the annual gross premium
(ii) Renewal year commissions are 4% of the annual gross premium
(iii) Mortality follows the Standard Ultimate Life Table
(iv) i = 0.05
Calculate the annual gross premium for this policy using the equivalence principle.
[A modified version of Question 7 on the Spring 2016 exam]
- A) 410
- B) 450
- C) 490
- D) 530
- E) 570
Answer this question and see the worked solution