SOA Exam FAM Sample Question 7.6
Study guide: Exam FAM
For a fully discrete whole life insurance policy of 2000 on (45), you are given:
(i) The gross premium is calculated using the equivalence principle
(ii) Expenses, payable at the beginning of the year, are:
| % of Premium | Per 1000 | Per Policy | |
|---|---|---|---|
| First year | 25% | 1.5 | 30 |
| Renewal years | 5% | 0.5 | 10 |
(iii) Mortality follows the Standard Ultimate Life Table
(iv) i = 0.05
Calculate the expense policy value at the end of policy year 10.
[A modified version of Question 16 on the Spring 2013 exam]
- A) –2
- B) –8
- C) –12
- D) –21
- E) –25
Answer this question and see the worked solution