4. Consider a fully discrete whole life insurance of 250,000 on a life age 40....
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4. Consider a fully discrete whole life insurance of 250,000 on a life age 40. Expenses are as follows: (i.) 10% of premium for the first year and 6% in subsequent years, (ii.) 25 per policy per year. Expenses are paid at the beginning of the year. Assuming that P40 = .0092, Peo = .0204, and i = .04, use the equivalence principal to (a.) determine the value of 40. (b.) compute the level annual expense loaded premium. (c.) determine the gross premium reserve at time 20. 4. Consider a fully discrete whole life insurance of 250,000 on a life age 40. Expenses are as follows: (i.) 10% of premium for the first year and 6% in subsequent years, (ii.) 25 per policy per year. Expenses are paid at the beginning of the year. Assuming that P40 = .0092, Peo = .0204, and i = .04, use the equivalence principal to (a.) determine the value of 40. (b.) compute the level annual expense loaded premium. (c.) determine the gross premium reserve at time 20
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