Define and interpret state-dependent insurance and annuity present value random variables and identify and calculate their expected values.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Premium and Policy Valuation for Long-Term Coverages. 37 min read, ~5,555 words.
Annuity benefits depend on the state the life OCCUPIES; insurance benefits depend on the TRANSITION just made. Continuous annuity EPV in state j given start in state i:. Transition insurance EPV paid on entry to state j from anywhere:. Linearity is the workhorse. Decompose any complex benefit into state-occupancy pieces...
Read the full lesson, free →
Worked examples, audio narration, and practice. No signup to read.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Common Mistakes
- Key Takeaways
- Exam Shortcuts
Learning objectives
- 2a
Browse all free Exam ALTAM lessons or jump into free Exam ALTAM practice questions.