#10. For a whole life insurance of 100,000 on (45) with premiums payable monthly for a period of 20 years, you are given
(i) The death benefit is paid immediately upon death.
(ii) Mortality follows the Illustrative Life Table.
(iii) Deaths are uniformly distributed over each year of age.
(iv) i = 0.06
Calculate the monthly net premium.
(A) 150
(B) 152
(C) 154
(D) 156
(E) 158
My question: In the solution, it looks as if we take the monthly premium and multiply by 12 and then set this equal to the benefits/premium. I thought the annuity symbol took into account the monthly payments?
(i) The death benefit is paid immediately upon death.
(ii) Mortality follows the Illustrative Life Table.
(iii) Deaths are uniformly distributed over each year of age.
(iv) i = 0.06
Calculate the monthly net premium.
(A) 150
(B) 152
(C) 154
(D) 156
(E) 158
My question: In the solution, it looks as if we take the monthly premium and multiply by 12 and then set this equal to the benefits/premium. I thought the annuity symbol took into account the monthly payments?
Fall 2014 MC Question help
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