SOA Exam FAM Sample Question 7.14

Study guide: Exam FAM

For a fully discrete whole life insurance of 100,000 on (45), you are given:

(i) The gross premium policy value at duration 5 is 5500 and at duration 6 is 7100

(ii) $q_{50} = 0.009$

(iii) $i = 0.05$

(iv) Renewal expenses at the start of each year are 50 plus 4% of the gross premium.

(v) Claim expenses are 200.

Calculate the gross premium.

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

Concepts tested