SOA Exam FAM Sample Question 6.50
Study guide: Exam FAM
On July 15, 2017, XYZ Corp buys fully discrete whole life insurance policies of 1,000 on each of its 10,000 workers, all age 35. It uses the death benefits to partially pay the premiums for the following year.
You are given:
(i) Mortality follows the Standard Ultimate Life Table
(ii) i = 0.05
(iii) The insurance is priced using the equivalence principle
Calculate XYZ Corp's expected net cash flow from these policies during July 2018.
[A modified version of Question 13 on the Fall 2017 exam]
- A) –47,000
- B) –48,000
- C) –49,000
- D) –50,000
- E) –51,000
Answer this question and see the worked solution