Effect of Changes in Underlying Assumptions on Reserves and Premiums
Free SOA Exam FAM (Fundamentals of Actuarial Mathematics) lesson in Premium and Policy Value Calculation for Long-Term Insurance Coverages. 11 min read, ~1,697 words.
Higher mortality always increases the whole life reserve: and, both push the reserve up. Lower interest generally increases the reserve: the benefit EPV is more interest-sensitive than the premium annuity. Re-valuation: the premium is fixed at original assumptions; only future and change. Most dangerous scenario: higher mortality plus lower interest...
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What this lesson covers
- Content
- Example 1
- Example 2
- Example 3
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
- 10d
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