Actuarial Science II - Actuarial Calculations

7 important questions on Actuarial Science II - Actuarial Calculations

   What three things do you need for an actuarial calculation?

  1. Probability of death of individual in a period of time
  2. Interest rate which can be earned on invested funds

What is lx, dx, px, qxand their formulas

  1. lx+1 = lx - dx
  2. px = lx+1/lx
  3. qx = dx/lx = 1-px


lx being number of survivors at x
px is survival rate from lx to lx+1
qx is mortality rate of age x to x+1

What is the remaining life expectancy at the age of x?

ex = sum k=1 to infinity px
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3 tips to avoid calculation errors

  1. be precise
  2. check when payments are due (due/immediate)
  3. check probabilities of payments!

What is a n-year term insurance

An n-year term insurance pays one unit at the end of death only if death occurs in first n years

What is a n-year pure endowment insurance?

Pure endowment of duration.
n payments at the end of n years if alive

What is a n-year endowment insurance?

Pays one unit at the end of the year of dead or at the end of n-th year, which ever occurs first

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