SOA Exam FAM Sample Question 7.38
Study guide: Exam FAM
For a fully discrete 30 payment whole life insurance of 1000 on (50) with level annual premiums of 16, _{k}V denotes the gross premium policy value at the end of year k, k = 0,1,2,... .
The original valuation assumptions include:
i) Mortality follows the Standard Ultimate Life Table
ii) i = 0.05
iii) Premium taxes are 2%
iv) There are commissions and various other expenses
Using the original valuation assumptions, _{10}V = 110.
At some point prior to year 10, your jurisdiction increased the premium tax rate so the premium tax assumption increased to 3%. All other assumptions are unchanged.
Calculate the revised value of _{10}V.
[Question on October 2022 FAM-L Exam]
- A) 112
- B) 114
- C) 116
- D) 118
- E) 120
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