IAI Nov 2007 Q12

Discussion in 'CT5' started by Srijana Raghunath, Feb 8, 2018.

  1. Q. 12) An individual aged 25 takes a pension policy with a term of 30 years. The policy requires payment of annual premiums in advance for two thirds of the policy term. On death, 10 times the annual premium is paid. On survival to the end of the term, a pension of Rs.12000 per quarter is paid in advance until the death of the policy holder. After vesting of pension no death benefit is paid.

    Assumptions : Mortality before age 55: AM92 ; Mortality after age 55 : PMA92C20 Interest : 4% p.a Ignore expenses;
    Calculate the annual premium under the policy

    In sol to this problem, it is calculated
    ä 25:20 = ä 25 - v^20 20p25

    Shouldn't it be ä 25 - v^20 20p25 ä 45 ?
     

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