- 10 Marks An Insurer Is Planning To Issue A Policy To A Life Age 0 Whose Curtate Future Life Time K Is Governed By Th 1 (36.45 KiB) Viewed 35 times
(10 marks) An insurer is planning to issue a policy to a life age 0 whose curtate-future-life time, K, is governed by the p.m.f. 0.15, k=0, k|90 = 0.25, k = 1,2,3 0.1, k= 4. The policy will pay 5 unit at the end of the year of death in exchange for the payment of a premium P at the beginning of each year, provided the insured survives. Assuming annual effective interest rate i = 0.05. Express the financial loss L for the insurance in terms of P, K,V, where P is the annual premium and v is the discount factor. Find the annual premium determined by each of the Percentile Principle with Pr(L > 0) <0.5.