The formula shown under the solution on page 22 is a general formula applicable for any years 0, 1, 2, 3, and so on.
EPV of all benefits, which you mentioned, can be calculated if you put a sigma sign in front of the formula with t starting from 0 to limiting age.
For expected claims cost in years 4 and 5, you simply need to plug in t = 3 and t = 4 in the formula and add the two results together. That is what has been done in the solution in the paragraph immediately below the general formula on the same page.
Anyway, the general formula is [sum assured x survival factor x claim inception rate x annuity x present value factor] for the expected claims cost. I think that for any inception/annuity calculation approach required in the exam, you should be able to get a significant number of marks if you include these 5 factors even if you make some mistakes.
Last edited by a moderator: Sep 17, 2013