How would you solve this question? I don't know how to handle the fact that the death benefit is paid at the end of the month of death and reversionary bonus is compounded in annual basis.
Consider an annual premium with-profit whole life insurance issued to a select life aged exactly 40. The basic sum insured is $200,000 payable at the end of the month of death, and the premium term is 25 years. Assume a compound reversionary bonus of 1.5% per year, vesting on each policy anniversary, initial expenses of 60% of the annual premium, renewal expenses of 2.5% of all premiums after the first, plus per policy expenses (incurred when a premium is payable) of $5 at the beginning of the first year, increasing by 6% per year compound at the beginning of each subsequent year.
Calculate the annual premium.
Thanks
Consider an annual premium with-profit whole life insurance issued to a select life aged exactly 40. The basic sum insured is $200,000 payable at the end of the month of death, and the premium term is 25 years. Assume a compound reversionary bonus of 1.5% per year, vesting on each policy anniversary, initial expenses of 60% of the annual premium, renewal expenses of 2.5% of all premiums after the first, plus per policy expenses (incurred when a premium is payable) of $5 at the beginning of the first year, increasing by 6% per year compound at the beginning of each subsequent year.
Calculate the annual premium.
Thanks
Question from AMCLR, 1st ed.
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