SOA Exam FAM Sample Question 7.36

Study guide: Exam FAM

You are checking gross premium policy values for a fully discrete whole life insurance of 1000 on (50).

$_{k}V$ denotes the gross premium policy value at the end of year k, k = 0,1,2,... .

The valuation assumptions were intended to include:

i) There are commissions and maintenance expenses payable at the beginning of the year

ii) There are no other expenses

iii) $q_{58} = 0.002736$

iv) $i = 0.05$

You discover that all intended assumptions were used correctly, except that calculations were based on $q_{58} = 0.003736$ .

The calculated results included $_{8}V = 86.74$ and $_{9}V = 100$ .

Calculate $_{8}V$ using the intended value of $q_{58}$ .

[Question on October 2022 FAM-L Exam]

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