Say we have a fully continuous 10-year term insurance issued to (30) and we are paying continuous premiums throughout the term. Force of interest and force of mortality are both constant.
We calculate the premium using the equivalence principle.
If we want to find the policy value, at say time 5 (or any time), using the prospective method (or any other method), would it always be equal to 0? Since mortality is constant and does not depend on age?
We calculate the premium using the equivalence principle.
If we want to find the policy value, at say time 5 (or any time), using the prospective method (or any other method), would it always be equal to 0? Since mortality is constant and does not depend on age?
General fully continuous policy value question
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