ST2 CMP Ch29 Investments

Solution 29.7 (iii)
Unit-related liability includes “small guaranteed liability in terms of… excess of sum insured over value of units held”. However, this is only on “value of death benefit only over the next month”.

I do not understand why the liability only includes next month’s benefits. Isn’t the liability supposed to include all benefits payable until end of contract?

Thanks for the help in advance!

 

they're assuming that future mortality charges match future mortality cost.