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Sep 06 , #10

M

MindFull

Ton up Member
Hi everyone,

I was wondering why for this question, the reserve for the people that have died during 2005 is added (and not subtracted) from the reserve for the end of the year.

(This ques. is #26 in the 2008 revision booklet)
Thanks much.
 
Dsar

for Q.no. 10 Sep 2006 paper:

Well, I guess it is because, the reserves given as of 12/31/2005 are for the policies in force on that date. So, it does not already include the reserves related to the two deaths took place in the year 2005.

So, you first calculate the reserves for each of the two deaths and then add them to the already given reserves as of 12/31/2005. This gets you the total reserves.

I guess rest of the calculations are straight forward...

please let me know of this makes sense to you...

Thanks,
Raj
 
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