Death strain at risk for endowment at the last year of the term is S-(V(t+1)-S) The first and last S means death benefit/survuval benefit respectively. Why death strain at risk for pure endowment at the last year of the term is only -V(t+1)? Why it don't need to deduct survuval benefit?
Hi, The death strain at risk generally is sum assured on death (S) - ( reserve at the end of the year (t+1V) + any survival benefit at the end of the year (R)). In the final year of a pure endowment we have: S=0, there is nothing paid on death. t+1V = 0, the policy is certain to end at the end of the year so no reserve will be required R = sum assured on survival So in fact in the final year it's (-sum assured on survival). In other words if the life dies in that final year we make a profit of 75,000 on that policy because we don't have to pay the sum assured. I think you are referring to a year before the final year of the term. In this case: S=0, there is nothing paid on death. t+1V = t+1V R = 0, sum assured on survival to the end of the year in question is 0. So if the life dies here it's the reserve at the end of the year that we get to release. Hope this helps. Let me know if there's anything here that is unclear.
Thank you for your reply very much. Sorry for my misexpression,what I want to ask is the death strain at risk at the final year of PE. I find that the death strain at risk at the final year of endownment is S-(V+R), but PE is S-V. I want to know the logic why the death strain at risk at the final year of PE is S-V. I stuck in it.
In which case the DSAR as the first one I spoke about there: S=0, there is nothing paid on death. t+1V = 0, the policy is certain to end at the end of the year so no reserve will be required R = sum assured on survival DSAR = 0 - (0 + R)
I'm sorry I changed my narrative in #3, please read it again, thank you very much.Thank you so much^^
Sorry, i'm not following. Is there a specific question you are referring to? DSAR for a pure endowment would be S-V (0 - V) in all years except the final year. In the final year it would be S-R (0 - sum assured on survival). Joe
After your explanation, I broke through my blind spot, and I found out the problem. Thank you for your help!
