April 2018 paper, Q13 Extra Maturity Cost

Discussion in 'CT5' started by CorkActuary, Sep 8, 2018.

  1. CorkActuary

    CorkActuary Member

    Can anyone explain how to calculate this for year 3 please??
     
  2. Mohit Gulati

    Mohit Gulati Active Member

    They say on maturity the 110% of bid value is payable, that means what ever is bid value take the 10% of that multiply that
    will survival probability and whatever comes after multiplying with survival probability that will be your expected maturity cost.
     
    Last edited: Sep 8, 2018
  3. CorkActuary

    CorkActuary Member

    Thanks so much. I was struggling to understand which probably from my deferment table to use
     
  4. Mohit Gulati

    Mohit Gulati Active Member

    generally in the third year there is no surrender, so survival probability is 1-death probability
    survival probability should not be an accumulated probability from beginning, for calculating the
    expected maturity cost,
     

Share This Page