Understand the implications of independence or dependence of future lifetimes in both versions of the joint life model. Identify sources of dependence and understand how they are accommodated in the models.
Free SOA Exam ALTAM (Advanced Long-Term Actuarial Mathematics) lesson in Joint Life Insurance and Annuities. 43 min read, ~6,492 words.
Two statuses: joint life fails on the FIRST death; last survivor fails on the SECOND. Identity:, so regardless of dependence. Sources of dependence: common shock, common lifestyle, broken-heart effect, shared environment, assortative mating; real couples empirically show positive dependence. Sign rules (positive dependence): independence UNDERSTATES,; OVERSTATES,. Accommodation: common shock adds...
Read the full lesson, free →
Worked examples and practice. Free with a free account, no card.
What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Example 4
- Example 5
- Example 6
- Example 7
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 3b
Browse all free Exam ALTAM lessons or jump into free Exam ALTAM practice questions.