SOA Exam FAM Sample Question 7.16

Study guide: Exam FAM

For a fully discrete 5-payment whole life insurance of 1000 on (80), you are given:

(i) The gross premium is 130

(ii) $q_{80+k} = 0.01(k+1), \quad k = 0, 1, 2, \ldots, 5$

(iii) $v = 0.95$

(iv) $1000A_{86} = 683$

(v) $_{3}L$ is the prospective loss random variable at time 3, based on the gross premium

Calculate $E[{}_{3}L]$ .

[Question 15 on the Fall 2014 exam]

Concepts tested