A fully discrete 30-year endowment insurance policy of 400,000 is sold to Jenna who is 50 years old. The endowment policy contains an option where the endowment benefit at the end of 30 years can be taken as a whole life annuity due, with a 10-year guarantee, payable monthly from age 80, based on the same pricing assumptions as for the endowment insurance. You are given that: The actuarial present value of the monthly payments at age 80 is equal to the amount of the endowment. Monthly annuities are calculated using the two-term Woolhouse formula. Mortality follows the Standard Ultimate Life Table with i = 0.05. - - - Calculate the amount of the monthly payment.

A fully discrete 30-year endowment insurance policy of 400,000 is sold to Jenna who is 50 years old. The endowment policy contains an option where the endowment benefit at the end of 30 years can be taken as a whole life annuity due, with a 10-year guarantee, payable monthly from age 80, based on the same pricing assumptions as for the endowment insurance. You are given that: The actuarial present value of the monthly payments at age 80 is equal to the amount of the endowment. Monthly annuities are calculated using the two-term Woolhouse formula. Mortality follows the Standard Ultimate Life Table with i = 0.05. - - - Calculate the amount of the monthly payment.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 19P

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