Hello. In question 13 of ct5 april 2014. Part ii) I'm unable to derive the GFLRV for the death benefits. The solution given in ASET is : 60,000* (1.0192308)^(t + K30+t ) v^T30+t. I don't understand why is K30+t used. If we use both t & K30+t . We wouldn't get the correct benefit at that time. For eg : a policyholder dies at time 2.5 So the K30+t will be 2 and t will we 2.5 So the power of (1.0 192308) will be 2+2.5 which is incorrect. So can anyone explain me this?
Hi Anu It is correct. Your error is in your value of K30+t. In your example K30+t is K32. This is 0 if the policyholder dies at time 2.5 as no complete years are survived. Therefore the bonus will be (1.0192308)^2+0, which is correct. Bev
