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Sep 2012 question 6

Y

Yohav

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.
 
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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