Hi, This problem is from Subject 105 - April 2001 Question 4. I am confused, which year mortality rate to use? As per my understanding I am considering the mortality rate for the age 55 (q55), but in the solution, it is given that 54. Can you please provide the supportive information in taking the age 54 instead of 55? I am rewriting the whole problem again here: Some time ago, a life office issued an assurance policy to a life now aged exactly 55. Premiums are payable annually in advance, and death benefits are paid at the end of the year of death. The office calculates reserves using gross premium reserves. The following information gives the reserve assumptions for the policy year just completed. Expenses are assumed to be incurred at the start of the policy year. Reserve brought forward at the start of the policy year 12,500 Annual Premium 1,150 Annual expenses 75 Death benefit 50,000 Mortality AM92 Ulitmate Interest 5.5% per annum Calculate the reserve at the end of the policy year. My understanding: It is given that the life now is aged exactly 55 years, that means the life completed 55 years. Now the running year is 56. That is, now we are at the beginning of the year 56. And also given the assumptions for the year just completed, so the reseve brought forward at the start of the policy year is the the reserve calculated at the end of age 55. We need to find the reserve at the end of the year 56th. For this I am using the mortality of age 55 (q55). Can anyone tell me, where i am failed in understanding the problem? Thanks in advance. Regards, Nagesh.
Considering "policy year just completed" with "life now aged 55" . Need to read questions very carefully.
