Sep 2012 question 6

Discussion in 'SP2' started by Yohav, Aug 13, 2019.

  1. Yohav

    Yohav Keen member

    They ask why the 35 year SV figure is negative.
    It seem that when appling the formula described in (i) the SV appear to be extremly positive (+50 K)
    I don't understand why the premiums accumulation isn't took into account.
  2. Lindsay Smitherman

    Lindsay Smitherman ActEd Tutor Staff Member

    The accumulation of premiums is taken into account, but by the very high ages (here, 85) most of the premiums paid would have been used up providing the death cover to date (ie the - S x assurance factor in the formula).

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