>> life contingencies [1]..

another LC question..

you are given:

- 2 states

  -> preferred with annual expected losses of 400

  -> standard with annual expected losses of 900

- no change in the expected losses for either class over the next 3 years

- the transition matrix

     0.85   0.15

     0.60   0.40

- i = 0.05

- no expenses

- losses are paid at the end of the year

- all insured remain insured for following 3 years

calculate the 3 year term insurance single benefit premium for a standard driver

okay..

soalan ni dia mintak SBP kan..?

so..

mmg berguna nombor 400 & 900 tu..

baru aku paham..

no tu digunakan utk cari SBP (single benefit premium) or APV (actuarial present value)..

untuk menjawab soalan di atas..

seperti biase..

kene cari 2Q(2,1) dulu..

2Q(2,1) = [ 0.6  0.4] [ 0.85  0.15 ] = [ 0.75  0.25]

                        0.60  0.40  

untuk cari SBP standard driver for 3 year term insurance..

guna formula ni..

SBP = (b^t standard)*v + (b^t Q(2,1))* v^2 + (b^t 2Q(2,1))* v^3 

    = 900*((1.05)^-1) + (400*0.6+900 *0.4)*((1.05)^-2) 

      + (400*0.75+900*0.25)* ((1.05)^-3)

    = 1895 #

yes..

the answer is 1895..

the thing that i wonder now is..

what is the function of having this words?

losses are paid at the end of the year

term insurance

i mean..

is it the same kind of technique and formula if they give

'paid at the beginning of the year'

'whole life insurance', 'endowment insurance', etc..??

hurm..

lets study more..

(^_^)v