Why is the survival benefit in the first example in this section 47,500? Whenever I attempt this I always come up with 46,000. Thanks
Bryo00 First of all, note that this is the "exam discussion" section of the forum, where people discuss how the exam went for them. For this type of query, you're better off posting in the "subject discussion" section of the forum, where there's more activity at this time of year. In the example you mention, there is a 15-year with-profit endowment assurance, with initial sum assured £25,000 and simple bonuses of 6% pa vesting at the end of each year. So each year, the sum assured is increased by £1,500. When it comes to the survival benefit, the order of events is: the end of the year is reached, then the bonus is awarded, then the benefit is paid. So the sum assured will have been increased for 15 bonuses in total, as the policyholder will get a bonus for surviving the final year. 15 x £1,500 = £22,500 and adding this to the initial sum assured of £25,000 gives £47,500. It always seems right to me that if you survive for 15 years you deserve 15 bonuses (one per year). Hope this helps, Mark.
