SOA Exam FAM Sample Question 7.29

Study guide: Exam FAM

For a fully discrete whole life insurance of B on (x), you are given:

(i) Expenses, incurred at the beginning of each year, equal 30 in the first year and 5 in subsequent years

(ii) The net premium policy value at the end of year 10 is 2290

(iii) Gross premiums are calculated using the equivalence principle

(iv) $i = 0.04$

(v) $\ddot{a}_{x} = 14.8$

(vi) $\ddot{a}_{x+10} = 11.4$

Calculate $_{10}V^{g}$ , the gross premium policy value at the end of year 10.

[A modified version of Question 16 on the Fall 2017 exam]

Concepts tested