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Unit fund Reserve Question

P

Parth Mehta

Member
How are the unit fund reserves calculated in the unit-linked assurance contract?
And please explain the solution for this question as an example:
A five-year unit-linked contract, issued to a life aged 52 exact at entry, has the following
vector of in-force expected cashflows:
(-518, 175, - 70, -161, 1890)
Using consistent assumptions, the projected unit fund values at the end of the year for this
policy are:
(1051, 2416, 4187, 6009, 8377)
Use the above information to calculate the total reserves (both unit and non-unit combined)
that the insurer would hold for a single policy in force at the end of year 1, according to the
following assumptions:
Mortality: AM92 Select
Interest: 2% pa effective [4]
 
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