SOA Exam FAM Sample Question 7.12

Study guide: Exam FAM

For a special fully discrete 25-year endowment insurance on (44), you are given:

(i) The death benefit is $(26 - k)$ for death in year $k$ , for $k = 1, 2, 3 \ldots 25$

(ii) The endowment benefit in year 25 is 1

(iii) Net premiums are level

(iv) $q_{55} = 0.15$

(v) $i = 0.04$

(vi) $_{11}V$ , the net premium policy value at the end of year 11, is 5.00

(vii) $_{24}V$ , the net premium policy value at the end of year 24, is 0.60

Calculate $_{12}V$ , the net premium policy value at end of year 12.

[A modified version of Question 13 on the Spring 2014 exam]

Concepts tested