SOA Exam FAM Sample Question 6.39
Study guide: Exam FAM
XYZ Insurance writes 10,000 fully discrete whole life insurance policies of 1000 on lives age 40 and an additional 10,000 fully discrete whole life policies of 1000 on lives age 80.
XYZ used the following assumptions to determine the net premiums for these policies:
(i) Mortality follows the Standard Ultimate Life Table
(ii) i = 0.05
During the first ten years, mortality did follow the Standard Ultimate Life Table.
Calculate the average net premium per policy in force received at the beginning of the eleventh year.
[A modified version of Question 11 on the Spring 2016 exam]
- A) 29
- B) 32
- C) 35
- D) 38
- E) 41
Answer this question and see the worked solution