Hi, I might be very late to ask this, but would really appreciate it if somebody could help here. In the calculation sheet given for Q3 (iii), the mortality rate used for age 65 seems to be the mortality rate before benefit starts. Also, the solution seems to be assuming that the benefit would not start until age 66. However, in my understanding of the question, it asks for the reduced annuity benefit if the benefit starts at age 65, so there should be no death/surrender claim and no premium income already at age 65. Can anybody please help me with this? Huge thanks!
It's worth pointing out that calculations were not required in this question. The calculations they did perform are a little confusing. It's very hard to see what they are trying to achieve and in our ASET product we've taken quite a different approach of looking at premiums received to age 65 and benefits expected from age 65. Regardless, there is, as you say, no need for age 65 benefits to be included in their spreadsheet. Joe
