Calculate premiums for state-dependent life insurance, long-term health insurance, and CCRCs using the equivalence principle.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Premium and Policy Valuation for Long-Term Coverages. 63 min read, ~9,492 words.
Equivalence principle: EPV of premium inflows equals EPV of benefits plus expenses at issue. State-contingent flows: premiums collect only in active states, benefits pay in claim states, and state-dependent death benefits use transition-specific firing the instant a life moves between states. Long-term health: when premiums waive on disability only sits...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Example 6
- Example 7
- Common Mistakes
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- Exam Shortcuts
Learning objectives
- 2c
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