• We are pleased to announce that the winner of our Feedback Prize Draw for the Winter 2024-25 session and winning £150 of gift vouchers is Zhao Liang Tay. Congratulations to Zhao Liang. If you fancy winning £150 worth of gift vouchers (from a major UK store) for the Summer 2025 exam sitting for just a few minutes of your time throughout the session, please see our website at https://www.acted.co.uk/further-info.html?pat=feedback#feedback-prize for more information on how you can make sure your name is included in the draw at the end of the session.
  • Please be advised that the SP1, SP5 and SP7 X1 deadline is the 14th July and not the 17th June as first stated. Please accept out apologies for any confusion caused.

mortality options Q&A5 Sol.5.7(ii)

D

D chandra shekhar

Member
on page 9 first paragraph reads as
" if the policyholders who do not take the option have, on average, higher than select mortality, then not all of our expected losses will occur , so profit will increase."
In the other paragraph of this same answer it is written that" The crucial question really is what mortality is shown by the people who do not effect the option .If these people show lighter mortality than select , the office would have made a profit on them .
Can some body explain:confused:
 
Hello

Aren't the 2 paragraphs trying to say the same thing?

The first one:
Would make losses on policyholders who have higher than select mortality.
If policyholders who do not take option have higher than select mortality,
then not all of these expected losses will occur
and so overall profit will increase.

The second one:
Would make profit on policyholders who have lighter than select mortality.
If policyholders who do not take option have lighter than select mortality,
then not all of these expected profits will occur
and so overall profit will decrease.

Hope this helps? Best wishes
Lynn
 
You must log in or register to reply here.
Back
Top