Hi, I have a question about the North American method in the Appendix of chapter 20. When calculating the standard premium for the contract (1) on page 19, why can't we look up the annuity a(HS)62:3] on page 139 of the tables for this part? Using the value on the tables gives a different answer (15000*0.114894=1723.41 as opposed to 1795.93), so I was wondering how do we know when to use the tables and when to use the formula? Thanks in advance!
Hi Claire We need to use this approach here as we are given the claim inception rate (0.3) rather than being told to use the rates given on page 138 of the tables. If we were told to use these rates we could absolutely use the rate given in the tables. The notation used shows it as a temporary annuity for this reason. I hope this helps. Thanks Sarah
