SOA Exam FAM Sample Question 7.41

Study guide: Exam FAM

For a special fully discrete 20-year term insurance of 100,000 with a return of premium endowment benefit on (70), you are given:

i) If the insured survives the 20-year term, all gross premiums are returned with interest at 5% at the end of 20 years

ii) The gross premium is 6,750

iii) Renewal commissions are 5% of premium

iv) $_{5}L$ is the gross future loss random variable at time 5, given the insured is alive at time 5

v) Mortality follows the Standard Ultimate Life Table

iv) (as printed) $i = 0.05$

Calculate the 90th percentile of $_{5}L$ .

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