April 06, ques B4 A company is interested in estimating policy lapse rates by age. It conducts an investigation into this, which lasts for the whole of the calendar year 2003. The investigation collects the following data for a sample of policies which are funded by annual premiums: the age last birthday of the policyholder when the policy was taken out; the number of premiums the policyholder paid before the policy lapsed. In addition, the number of policies in-force on 1 January each year is available, classified by age x last birthday and years t elapsed since 1 January 2003, * (Px,t ). In part of the answer, it says this: But the range of exact ages that could apply to a life aged x last birthday on the policy anniversary prior to lapsing is (x, x + 2). Why is the range of ages between x and x+2??? Thanks.
A06 B4 policy year rate interval Hi JamiacanJen, Let's consider some numbers rather than x: Today is the 28th March 2008. Say, we are looking at my friend Brian, "a life aged 30 last birthday on the last policy anniversary" How old might Brian be today? His last policy anniversary could be any time over the last year. ie anywhere between 28th March 2007 and 28th March 2008. Now, at this point he was 30 on his last birthday. If his policy anniversary was 28th March 2007, his 30th birthday could be anywhere between 28th March 2006 and 28th March 2007. If his 30th birthday was on 28th March 2006, today Brian would be 32! On the other hand Brian's last policy anniversary could be 28th March 2008 (today!) and, at this point, his last birthday might also be 28th March 2008 (today!). In this case Brian would be 30 today. So, overall, Brian's exact age could be anywhere between 30 and 32. Anyone who didn't know Brian would be best off guessing he was 31 exactly Now replace Brian with "a life" and 30 with x, Good luck! John PS I appreciate there is a slight issue with 28th March to 28th March (probably should say 29th March to 28th March) but this is just being picky! ;-)
Hmmmm Ok, this one does seem like a a tongue twister, but I think I get the meaning... will have to re-read a couple times though.... Thanks!
I know I'm down to the wire here but I tried to look at this question and again I'm not quite sure... I understand the x+2 part (i think), however I'm not sure what P*(x,t) has to do with the definition. It just says policy figures every 1 Jan. plus age last birthday and t years since 1 Jan. for the defin. Not seeing how that relates to policy anniversary. Am in DESPERATE need. Thanks much.
Too late to get back to you - sorry. Hope it didn't come up! (or you sorted it in the end.) Doubt you want to worry about it after the event...Hope it went well for you.
LOL. Mr. Chadburn, I actually live in Jamaica, so as I am writing this, it's only 6:30 am Wed. morning. But thanks anyway.
