Exercise 6.5 Consider a fully discrete 10-year term insurance issued to a select life aged 50, with sum insured $100 000. Assume that mortality follows the Standard Select Life Table, and assume an interest rate of 5% per year. (a) Write down an expression for the net loss at issue random variable. (b) Calculate the net annual premium.

Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter10: Sequences, Series, And Probability
Section10.8: Probability
Problem 68E
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Exercise 6.5 Consider a fully discrete 10-year term insurance issued to
a select life aged 50, with sum insured $100 000. Assume that mortality
follows the Standard Select Life Table, and assume an interest rate of
5% per year.
(a) Write down an expression for the net loss at issue random variable.
(b) Calculate the net annual premium.
Transcribed Image Text:Exercise 6.5 Consider a fully discrete 10-year term insurance issued to a select life aged 50, with sum insured $100 000. Assume that mortality follows the Standard Select Life Table, and assume an interest rate of 5% per year. (a) Write down an expression for the net loss at issue random variable. (b) Calculate the net annual premium.
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