SOA Exam FAM Sample Question 7.7

Study guide: Exam FAM

For a whole life insurance of 10,000 on ( $x$ ), you are given:

(i) Death benefits are payable at the end of the year of death

(ii) A premium of 30 is payable at the start of each month

(iii) Commissions are 5% of each premium

(iv) Expenses of 100 are payable at the start of each year

(v) $i = 0.05$

(vi) $1000A_{x+10} = 400$

(vii) $_{10}V$ is the gross premium policy value at the end of year 10 for this insurance

Calculate $_{10}V$ using the two-term Woolhouse formula for annuities.

[Question 22 on the Spring 2013 exam]

Concepts tested