Variance of term assurance payable immediately on death - claims acceleration term

Discussion in 'CM1' started by Danny, Mar 18, 2024.

  1. Danny

    Danny Active Member

    How does the claims acceleration term interact with the terms with squared interest rate? I.e would we have:

    ^(2)Abar^(1)_(x:n)=(1+j)^(0.5)(^(2)Abar^(1)_(x:n))=((1+i)^2)^(0.5)(^(2)Abar^(1)_(x:n))=((1+i)(^(2)Abar^(1)_(x:n))
     
  2. Joe Hook

    Joe Hook ActEd Tutor Staff Member

    (2)TA:x:<n> term is the expected present value of a term assurance at the squared rate of interest. If instead it's (2)TABar:x:<n> then you just take your expression for the expected present value of a term insurance which pays immediately on death and evaluate at the squared rate of interest ie
    (1+i)^0.5 * TA:x:<n> where i is the squared rate of interest and TA is evaluated at the squared rate of interest.
    Joe
     
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