CT5 q&a bank 3

hi,

in question 3.26, part 3, can anyone explain to me the EPV of other expenses?

why have we taken (1- 2pHD at age 57) instead of taking (1- 1pHD at age 58)?

thanks in advance.
regards,
shyam

 

I think this is because renewal is only applicable to remain active at 2nd year

(1-p^HD at age 57) is for remain active for one year
And (1-2p^HD) is for remain active for 2nd year

But i am not sure

 

Thank you. I have got the point.

Thanks!
Shyam