Hi, Can anyone suggest why in solution death benefit and surrender benefit didn't calculated in this question? Is it because these benefits are same as bid units value? If this is the case then how about death and surrender prabability doesn't work here ? Please review and suggest
1) Death benefit is bid value of units. So no cost of insurance incurred. 2) Surrender value is again bid value. Paying bid value doesn't affect the cash flow in non unit fund. If extra death benefit in excess of bid value is payable and suppose there are some charges on surrender then both will contribute in non unit fund. 3) probabilities works here. independent rates are used to calculate dependent probabilities which then used to calculate profit vector and premium signature.
